Lenders Take Risks on Bad Credit Once Again

A lot of people would think that the country and its lending industry learned something positive from transactions with those who have poor credit, following the very gloomy recession in the years of 2008 to 2010, and also after the associated trend of foreclosures, repossessions, defaults and personal bankruptcies.

On the other hand, the opposite is taking place at this point in time.

A few of the major lenders are starting to return into making loans for borrowers with bad credit. These are different from the go-go years paving the way to the breakdown in 2008, when lenders would lend money to borrowers with poor credit, or in the situation of liar loans, zero credit at all. After everything that occurred, one does not necessarily have to be too scared to worry that, once initiated and considering the strong competitiveness of the lending industry, this trend will go faster.

Based on some reports coming from Equifax, one of the three credit reporting bureaus, 1.1 million worth of new credit cards was given by lender during the month of December in the previous year to those consumers with bad credit. There was an increase of more than 12 percent compared to December of the year 2010.

In addition, 23 percent of new car loans were made up of borrowers with bad credit for the fourth quarter in the previous year. There was an increase of 17 percent when compared with the fourth quarter of the year 2009.

Also, reports coming from Times state that car loans are being bundled and it earned roughly $11.7 billion in the previous year when it was sold as securities. There was an increase when compared to the sales of $2.17 billion in the year 2008.

This might be a warning to the country and its lending industry for another credit meltdown.

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