Credit thaws for risky customers

Donna Harris covers automotive retailing for Automotive News.
The latest data from research firm Experian Automotive suggest the credit thaw is finally happening at the low end of the credit spectrum.

The report shows that the share of new-vehicle loans to borrowers with tarnished credit -- from those with fair credit to the very riskiest -- grew by 12.7 percent year-over-year in the third quarter of 2010.

Both 30- and 60-day delinquency rates declined year over year. The 30-day delinquency rate was 2.99 percent, down from 3.27 percent, and the 60-day delinquency rate was 0.77 percent, down from 0.93 percent.

The average credit scores for customers who financed new or used vehicles were also down from a year ago, which is also a sign lenders have eased credit.

With the recent jump in consumer confidence and the aging vehicle fleet, broader availability of credit should keep the industry’s recovery rolling.