The pool of Americans who would qualify for prime or super prime credit is steadily shrinking while the percentage of Americans who have to take sub-prime and so called "deep sub-prime" loans has increased, according to a recent study.
The credit bureau Experian commissioned the research firm Oliver Wyman to conduct the study.
"Our analysis further indicated that while loan originations increased by 38% from the fourth quarter of 2008 to the first quarter of 2009, driven primarily by a mortgage refinancing wave, the increase was limited to the most creditworthy consumers," said Charles Chung, Experian's senior vice president and general manager at the credit bureau. "In fact, origination actually declined for subprime and deep subprime consumers, a reflection of lenders' continued reduced appetite for credit risk."
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The study also found that lenders are continuing to manage their risk exposure by aggressively reducing credit lines on revolving loans such as bank cards. Over the last 12 months, bankcard credit lines have declined from $3.8 trillion to $3.1 trillion, a 17% decline.
Looking at the economic climate as a whole, several loan products experienced a leveling off of early- and mid-stage delinquency rates in the second quarter of 2009, the firms said when announcing the study results.
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