ATLANTA – The credit landscape continues its consistent recovery heading into the second quarter of 2012, with the exception of home finance, according to Equifax’s March National Consumer Credit Trends Report.

At the end of the first quarter, U.S. consumer debt was at $10.9 trillion, down more than 11 percent from its peak of $12.4 trillion in October 2008. Additionally, credit write-offs are 50 percent lower than in March 2009, when banks wrote off a total of $39.7 billion. In March 2012, the number stood at $20 billion, reflecting stronger consumer finances.

“During the recession, the average size of delinquencies rapidly increased as dollar rates were outpacing total number of delinquent accounts, a trend that has since reversed in auto, bankcard, consumer finance, and retail card categories,” the report read, in part.

More than 72 percent of total delinquencies are still tied to loans originated between 2005 and 2007, which account for 36 percent of balances outstanding. Loans opened in 2009 and later have performed much better, the report said. Only 12.6 percent of delinquent accounts are from credit lines or loans opened in or after 2009.

New non-mortgage credit balances continue to increase, while new auto, bank and retail cards, consumer finance, home equity and student loan credit rose to $61 billion in January 2012, an 11 percent increase over the same time a year ago when new accounts totaled $55 billion.

“Lower delinquency rates and fewer write-offs coupled with the growth of new credit across multiple sectors clearly outlines the increased activity of consumers and their renewed faith in the marketplace heading into the second quarter,” said Equifax Chief Economist Amy Crews Cutts. “Aside from Home finance, which will require a longer recovery time due to long foreclosure process, the data reflects the improving U.S. economy as consumers explore new financial options and exercise due diligence in repaying their existing debts.”

The following are key from the Equifax report:

Auto

• Auto loan and lease balances rose to a post-recession high of $727.5 billion in March 2012.
• Auto finance loans totaled more than $380 billion — the highest since the third quarter 2009. Delinquency rates among all auto loans are at their lowest point in five years.
• Auto sales are rising fast and new auto loans to pay for them are also growing. New auto loans obtained from banks in January 2012 rose to 728,000 accounts, up from 630,000 a year ago, while new auto loans from finance companies grew to 753,000 accounts from last January’s 735,500.

Bankcard and Consumer Finance

• Outstanding bankcard balances in March 2012 stood at $532.8 billion, an $8 billion decrease from the previous year; however, this is a modest drop compared to the decrease of more than $54 billion seen from 2010-2011.
• In March 2012, delinquencies and write-offs among existing bankcards were well below pre-recession levels and the lowest in five years.
• Available credit, the difference between credit limits and balances, is climbing and in March 2010 reached nearly $1.9 trillion, the highest since September 2009.
• New consumer finance loan volume totaled 1.4 million new accounts in January, an increase of 8 percent from the same month a year ago.
• Consumer finance loans taken out in January totaled $4.3 billion, a 12.1 percent increase over January 2011 volumes.

Student Loans

• While still elevated from previous years, write-offs decreased from the March 2011 and March 2012 period, the first reverse in the trend in six years.
• The average amount per new loan is currently $4,548, down nearly 20 percent from Jan. 2011 ($5,572). This was the first decline in three years.
• Similarly, loan amount per student dropped 12 percent to $6,917 vs. the same time last year.
• Borrowers between the ages of 30 and 29 took out 17 percent of the number of new student loans in January, equating to nearly 15 million loans. However, their loans represent 24 percent of the total dollar amount of new student loans opened in January (approximately $157 billion).
• Conversely, the 23-and-under age range took out nearly twice as many loans (just over 30 million), yet account for nearly the same total dollar amount.

ATLANTA — The latest Equifax National Credit Trends Report revealed that auto finance companies have increased lending by more than 47 percent over the past two years. Auto finance lenders also have outpaced bank and credit union in lending to subprime borrowers over the same time period.

The report indicated that there were 854,800 auto finance company-originated loans in July 2011 vs. 581,300 for July 2009. Auto loans made to subprime borrowers now account for 38.5 percent of all auto loan originations for auto finance companies and 17.6 percent for banks and credit unions — numbers that are quickly approaching pre-recession levels, reported F&I and Showroom magazine.

By contrast, 820,200 loans were originated by banks and credit unions for the same period in July 2011 vs. 832,000 for July 2009, a decrease of less than 2 percent, according to Equifax.

Delinquency rates continue to improve for outstanding auto loans currently 60 or more days past due, which have fallen to 1.63 percent of loans. The improvement reflects a continuation of sustained credit retraction that the auto lending industry has experienced earlier than other lending segments, said Michael Koukounas, senior vice president of Special Client Services for Equifax.

“With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a wider band of consumers, which has helped enable the auto lending industry to recover more quickly than others,” he noted.

In July 2011, 1.7 million auto loans worth $32 billion collectively were originated, according to Equifax. From January to July 2011, 11.3 million new auto loans worth a collective $213.9billion (a 14.8 percent increase vs. the same six-month period last year) had been originated, a 13.2 percent increase over January-July 2010 totals.

The report also revealed that average monthly payment has remained relatively unchanged over the last year, signaling that the growth the industry is experiencing is tied to increases in number of loans rather than an increase in average loan amount, Koukounas added.

Consumer credit increased at an annual rate of 0.5 percent in April, according to the Federal Reserve’s monthly report.

Non-revolving credit, which includes auto loans, rose at an annual rate of 7.1 percent in April. Revolving credit continued its month to month decline and fell at an annual rate of 12 percent.

Interest rates on new-vehicle loans continued to drop and reached 4.13 percent in April, down from 4.28 percent in March, but still higher than 3.94 percent in January.

Loan terms remained stable month to month at 62.8 months in April. This was slightly above the 62.5 months recorded in February and down from the 63.5 months posted in January.

The loan-to-value ratio on new-car loans remained steady month to month at 88 percent in April, but was down from 89 percent in February and 90 percent in January.

Amount financed also fell for the fourth-consecutive month to $27,797 in April, down from $27,912 in March. The amount financed in April was $243 less than the $28,040 recorded in February, and $1,582 less than the $29,379 posted in January.

Consumer credit decreased at an annual rate of 3.3 percent in the third quarter and continued to decline in October, according to the Federal Reserve’s monthly report.

The loan-to-value ratio on new-car loans increased to 93 percent in October, up from 91 percent in September. The average loan-to-value ratio in the third quarter was 90 percent.

The amount financed increased from $30,380 in September to $32,223 in October, an amount that was also $4,339 higher than the average amount financed in the third quarter ($27,884). Year-to-date, the month also represented the highest level for amount financed.

Additionally, interest rates dipped from 3.5 percent in September to 3.42 percent in October, which is more closely aligned with the July figure of 3.43 percent. The average interest rate in the third quarter was 3.66 percent.

Loan term increased slightly from 63.6 months in September to 64.4 months in October. Average loan term in the third quarter was 62.7 months.

Consumer credit patterns returned to their status quo in September, with interest rates, loan terms and loan-to-value ratios reverting to their pre-Cash for Clunkers (C4C) levels, according to the Federal Reserve’s monthly report.

The loan-to-value ratio, which fell to 86 percent in August during C4C, rebounded to 91 percent in September.

The amount financed increased from $24,405 in August to $30,380 in September. Year-to-date, this was the highest level for amount financed for new-car loans.

Additionally, interest rates decreased from 4.06 in August to 3.5 in September, which is more closely aligned with the July figure of 3.43 percent. Loan lengths increased slightly from 61.8 months in August to 63.6 months in September.

Consumer credit patterns returned to their status quo in September, with interest rates, loan terms and loan-to-value ratios reverting to their pre-Cash for Clunkers (C4C) levels, according to the Federal Reserve’s monthly report.

The loan-to-value ratio, which fell to 86 percent in August during C4C, rebounded to 91 percent in September.

The amount financed increased from $24,405 in August to $30,380 in September. Year-to-date, this was the highest level for amount financed for new-car loans.

Additionally, interest rates decreased from 4.06 in August to 3.5 in September, which is more closely aligned with the July figure of 3.43 percent. Loan lengths increased slightly from 61.8 months in August to 63.6 months in September.