Lower delinquency spells broadening credit for subprime borrowers

As the economy continues to improve, many of the nation’s financial risk experts believe lenders will keep broadening credit standards while delinquencies remain in decline.

Bank risk professionals now believe that lenders will keep allowing subprime borrowers to take on credit card debt and have more access to auto loans over the next six months, according to a survey by the Professional Risk Managers’ International Association for the credit scoring company FICO. In all, 50 percent expect subprime auto lending to expand most significantly, while 38 percent believe credit cards will see the largest gain. Only 12 percent felt the same about residential mortgage lending.

Further, experts also predicted that instances of delinquency for most account types would decline in the second half of the year, the report said. The majority expected dips in late payments on auto loans (77 percent), mortgages (73 percent), small business loans (72 percent) and credit cards (69 percent).

Those who have run into financial trouble and ended up seeking some sort of debt relief option may want to be cautious about borrowing in the future, and approach any new accounts they open responsibly.