New Credit Growth Is Sign Of Economic Stability

The amount of new credit issued grew from $209 billion in April, 2010 to just over $240 billion in April, 2011. The new credit being issued is more tightly controlled than in previous years and delinquency rates are much improved. Both are signs that the American economy is stabilizing and poised to grow.

According to Equifax’s latest monthly Credit Trend Report these numbers are still below the $400 billion issued in 2006/2007, just before the recession began, and show a better level of quality in the loans issued. ''Loans opened since 2008 with much tighter underwriting are doing much better than loans booked between 2005 and 2007. More than two-thirds of all delinquent balances are from these earlier loans.'', said Michael Koukounas, senior vice president of client services for Equifax.

Low credit score auto loans, credit cards, and consumer loans are all on the rise. Unfortunately, home mortgages and student loans are still defaulting at unexpectedly high rates. Hopefully, these trends can continue after the downgrading of the United States' debt.