Credit Applications Are Down and Rejection Rates Are Up

Mish

Need Credit? You may be out of luck, especially on credit card requests.

Credit Access Largely Down during the Pandemic

The New York Fed Credit Survey shows credit applications are mostly lower with rejections higher. 

  • The October 2020 survey shows most credit application and acceptance rates falling sharply with the onset of the coronavirus pandemic. 
  • Application and acceptance rates for credit cards and credit limit increases showed the largest declines since February 2020, followed by auto loans.
  • However, the application rate for mortgage refinancing continued to climb through 2020, driven by demand from borrowers with high credit scores (above 760). 

Credit Card Application and Rejection Rates 

Credit Card Application and Rejection Rates 2020-10

Credit Card Limit Increase Requests and Rejection Rates

Credit Card Increase Requests and Rejection Rates 2020-10

Auto Loan Requests and Rejection Rates 

Auto Loan Requests and Rejection Rates 2020-10

Home Loan Requests and Rejection Rates 

Home Loan Requests and Rejection Rates 2020-10

Mortgage Refi Requests and Rejection Rates

Mortgage Refi Requests and Rejection Rates 2020-10

Standout Records

  • The credit card application rejection rate is a record 21%.
  • The credit card limit increase rejection rate is 37%. The record high level is 38% hit in June and also in 2014.
  • The mortgage refinance rejection rates is a record low 6%.

If you want to pad your credit card to pay the bills, there is a very good chance you cannot do do.

But if you own a house and are current on your mortgage, hooray.

Mish

Comments (18)
No. 1-6
Eddie_T
Eddie_T

My credit score has continued to go up, just because I make my payments more or less on time (aka no 30 day lates).....

Seems to me like the cut-off for an “excellent” credit rating has nudged higher over the past few years. . I remember when the best mortgage rates could be gotten with a 720 score, and when I checked my rating a couple of years ago.....they called it excellent above 740.

Now (on Credit Karma) they’re calling it excellent on Transunion and Equifax if it’s above 750. I see you’re calling for 760.

I need to refi everything I own.....but I sure don’t want the hassle.

But I have to do the numbers and see how much it might help and whether it’s worth it to go through the process. Hopefully I can do all the mortgages with one app process...

It has gotten somewhat easier because everything is available online.....the months of banks statements, my tax returns, the info needed for a fresh cash flow statement and statement of net worth....hopefully I can farm so me of that out to my daughter, who is much better than I am at rounding up the data.

They always, always, always ask for everything at least twice, and no matter how much info they have, the underwriter wants to justify his job by asking for a few more details.

PecuniaNonOlet
PecuniaNonOlet

Oh no, auto loans down and rejections up? What are the big autos going to do! more layoffs or more bailouts?

I guess if you own a home, you are less likely to get evicted. It you don't, you are screwed.

Sechel
Sechel

banks always cut back on credit after they see problems with their portfolio and borrwers often mistake an LOC for a rainy day fund until they find the back cut them off due to a change in the banks risk exposue apetitte

Six000mileyear
Six000mileyear

Application rates were trending lower, and rejection rates higher, a year before COVID hit. All COVID did was amplify the trend.

Dodge Demon
Dodge Demon

Max out the credit cards on Pb, Au, Ag.

davidsullivan
davidsullivan

The credit card limit increase rejection rate is 37%. The record high level is 38% hit in June and also in 2014.


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