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Credit Watchers Are Seeing Good Signs for 2011

By
Services for Real Estate Pros with Denim Marketing

There’s good news about the credit world – news that may be a sign things will improve soon in the real estate market. The biggest surprise: Home equity lines of credit have been on the increase. Lines of credit increased year-over-year in October 2010, the first time since Equifax experts began tracking the levels in 2006.


The news was reported at the Equifax Personal Finance Blog in the article, “Economy 2011: Credit Patterns Show Signs for Improvement in 2011.” The authors called 2011 “a fresh start, a new day” for credit cycles.


The leading indicator in all of the good news is in the area of new auto loans. These were up 17 percent year-over-year. Past posts have reported that these loans are more likely to go to high risk borrowers than they were recently.


And the third sign of good things to come? Credit cards. Originations are up, even for those subprime or high risk borrowers. Card balances are increasing, too, demonstrating incrased spending and optimism.


Another credit card statistic relates to the closing of card accounts. In late 2008 through all of 2009, credit card issuers were closing cards to manage their level of future risk. In other words, the more unused funds there were available to their card holders, the greater the lenders’ risks. They started closing accounts of high risk card owners and even some that weren’t high risk. In the worst part of the recession, some 108 million cards were closed, compared to 66 million cards in the preceding year. Now, according to Equifax, the card closing stage seems to be behind us.


You can see more analysis about the state of the credit universe at the Equifax Personal Finance Blog. You can add your comments or questions and even sign up to receive updates directly in your inbox. Check it out!


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