Financial institutions eased their lending restrictions during the first quarter of 2011 in order to maintain competitive with other banks and nonbank lenders, according to the Federal Reserve's April 2011 Senior Loan Officer Opinion Survey.
The survey, which included responses from 55 domestic banks and 22 U.S. branches and agencies of foreign banks, found a large number of financial institutions lifted hard-to-meet requirements for credit card and auto loans.
Although banks have loosened their lending policies, many consumers are still wary of taking on debt because their finances and credit are not in order, the Fed said. Some consumers may worry that though they may qualify for an auto loan or a new credit card, without a healthy credit score, the rates they will be eligible to receive may be out of their price range.
Consumers with bad credit may be able to land a quick credit fix by checking their credit report for inaccuracies or items that may have been reported unfairly.
To fix these types of problematic and questionable items, consumers may want to send dispute letters to the credit bureaus and the credit company at fault. Working with a credit attorney to take these actions may help a consumer improve their credit scores en route to more financially beneficial interest rates.