Consumers who have been locked out of the credit system because of their poor credit scores may now have more luck obtaining a credit card.
According to Equifax's April National Credit Trends Report, lenders are extending more card offers to individuals who fall into the subprime credit category. The data shows that subprime bankcard originations increased more than 75 percent in February 2011 compared with a year earlier.
"The latest Equifax Credit Trends Report indicates a market reversal relative to bankcard originations," said Michael Koukounas, senior vice president of Special Client Services for Equifax. "The industry experienced significant credit limit contraction of almost $1 trillion during the Great Recession, driven by aggressive risk management and high levels of inactive account closures. With the latest data, we are seeing some loosening of credit overall, particularly among subprime bankcard originations compared to this time last year."
Although more subprime consumers may be able to get their hands on financing offers, many will have to settle for high interest rates because of their bad credit. Some of these individuals may be able to boost their three-digit numbers by investigating and disputing credit reporting mistakes. In many cases, a credit repair company may be a helpful resource to facilitate this process.