Creditnet News Story
Average credit score for car loans increases
Thursday, December 10, 2009
By Danielle Robson
Lenders raising requirements.
A recent report from Experian Automotive shows that the average credit score for people who get a car loan increased as lenders try to be more careful and reduce risk.
According to the company, 775 was the average credit score of those people who got a car loan for a new vehicle during the third quarter of 2009, which is an increase from the 762 seen during the same time period last year. Loans for used cars also saw a higher average credit score for the quarter, up from 670 last year to 684.
Though 30-day delinquencies on car loans continued to increase during the third quarter, their rate did slow down. Delinquencies increased 5.8 percent when comparing the third quarters of 2008 and 2009, which is down from the 9.5 percent increase seen between the same time periods in 2007 and 2008.
"Lending institutions are making less risky loans right now," Scott Waldron, president of Experian Automotive, said.
Lenders who provide car loans aren't the only members of the industry who are tightening up their credit score requirements. Companies that make credit card offers are also being more careful, especially in light of new laws regulating the industry from the federal government set to take effect in February 2010.
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