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Equifax: Total Outstanding Auto Debt at Highest Point in 4 Years
While analysts found the number of consumers considered to be subprime borrowers is actually decreasing in some of the nation's largest cities, Equifax's latest National Consumer Credit Trends Report showed the amount of auto loan debt rose to the highest point in four years as lending to those subprime customers jumped by double digits.

As of the end of January, Equifax indicated the balances on outstanding auto loans totaled $782 billion, the highest level since January 2009 for a 48-month high. The total number of existing loans stands at 59 million, the highest level since July 2009 for a 42-month high.

By source, analysts mentioned loans funded through financial institutions such as banks, savings and loans or credit unions, are at more than $372 billion, realizing a 60-month high and back to pre-recession levels.

Similarly, at more than $409 billion, balances on loans funded by auto finance companies are at its highest level in 46 months.

Equifax highlighted delinquency rates within the auto portfolio are also improving, and by year-end 2012 decreased by nearly 11 percent from same time a year ago. Meanwhile auto loan and lease losses in that same period dropped nearly 10 percent.

"Sales of new cars and light trucks are rising steadily, though they are still well below pre-recession levels of roughly 17 million units," said Equifax chief economist Amy Crews Cutts. "Yet auto lending, including leases, is now back to pre-recession levels, driven in part by the very attractive interest rates being offered on these loans and a gradual increase in willingness to lend to less-than-perfect credit borrowers."

Number of Consumers with Equifax Credit Scores Below 620 Declines; Hello Good Credit ?
The number of consumers with subprime credit scores is shrinking across the country, according to new data from Equifax.

The total number of consumers with Equifax credit scores below 620 fell 2.1 percent, or by about 1 million consumers, in the third quarter of 2012 versus the third quarter of 2011.

The overall share of consumers with Equifax credit scores under 620 fell by 0.7 percent (from 25.9 percent to 25.2 percent) during that same period.

Analysts discovered the trend is playing out to varying degrees in different metropolitan areas with Chicago seeing the largest decline in consumers with Equifax credit scores below 620.

In the Chicago-Gary-Kenosha metro area, 1.5 million consumers had a credit score of 619 or below in the third quarter of 2012, a 9-percent decline from the same quarter in 2011.

On the other end of the spectrum, Houston is the only metro area among the top 25 that had an increase in consumers with Equifax credit scores below 620 with a 0.6 percent increase in the number of consumers in the lowest category when compared to the same period in 2011.

However, when accounting for population growth in Houston, the percentage of the Houston population with subprime credit scores fell by 0.5 percent.

Equifax explained credit scores below 620 are considered subprime for the purposes of this report. The firm pointed out a consumer with an Equifax score below 620 likely will have a harder time securing credit from a bank or other lender and may have to pay a higher interest rate if a loan is secured.

"Consumer credit scores are improving in most major metropolitan areas," said Trey Loughran, president of the personal solutions division at Equifax. "The job market is improving and time is starting to heal the wounds of the Great Recession."

Loughran continued that the geographic differences can be attributed to a number of factors, including employment, population shifts and demographic changes.

For instance in Chicago, Equifax noted the unemployment rate declined 1.5 percentage points to 8.8 percent - the fifth best improvement in unemployment among the largest 25 metro areas.

Also, the firm said there are significant improvements in early housing-bust markets such as San Francisco, Sacramento, San Diego, Los Angeles, Las Vegas, Phoenix and Miami where consumers' credit scores are starting to recover after foreclosures.

"It is nice to see that over 1 million people across the country have moved out of the below 620 range," Loughran said. "We are seeing a trend of consumers being careful and disciplined about their use of existing credit while also being cautious about using new accounts they have opened."

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