Deterioration of loan performance has moved lenders to tighten standards. Based on Federal Reserve Senior Loan Officer survey data, we’ve seen the following changes since 2016:
- 4 quarters of lenders reporting tighter loan standards
- 5 quarters of increasing spreads on loan rates
- 4 of 5quarters with increases in minimum required down payments
- 5 quarters of higher minimum required FICO scores
- 6 quarters of tightening policies on customers who do not meet credit score thresholds
S&P/Experian reported that the auto loan default rate fell to 0.82 percent in June 2017, the lowest level in the data series, which dates back to 2004.