More Subprime Borrowers Are Missing Loan Payments

DEAD7

Veteran
Supporter
Joined
Oct 5, 2012
Messages
49,548
Reputation
4,025
Daps
86,312
Reppin
Fresno, CA.

More Subprime Borrowers Are Missing Loan Payments



The share of subprime credit cards and personal loans that are at least 60 days late is rising faster than normal, according to credit-reporting firm Equifax. In March, those delinquencies rose month over month for the eighth time in a row, nearing their prepandemic levels. Rising delinquencies were inevitable following their decline during the pandemic, many lenders and analysts said. Even so, the increase is getting attention from investors partly because the Federal Reserve, facing the highest inflation since the early 1980s, is embarking on what is expected to be the sharpest series of interest-rate rises in years. Higher loan delinquency figures can indicate stress on the part of consumers whose spending is a significant driver of economic activity.

Fears that rising rates will throw the economy into recession have fueled the worst start of the year for stocks in decades. A poor earnings season for major U.S. retail chains has intensified those concerns this week, prompting large declines in major retail shares and sending the Dow Jones Industrial Average to its steepest drop of the year Wednesday. Delinquencies on subprime car loans and leases hit an all-time high in February, based on Equifax's tracking that goes back to 2007. Many people, including those with less-than-perfect credit, paid off debts and built up savings during the pandemic, a surprising outcome considering that lenders at first thought borrowers would default en masse when Covid-19 hit. The government's response, including stimulus payments and child tax credits, boosted many families' financial health.
 

Hostile

All Star
Joined
Nov 18, 2016
Messages
2,417
Reputation
745
Daps
4,428
Paid $12,000 in the past two months. shyt started affecting my credit score in a negative way from paying too much too fast. Was trying to have it all paid off before June hit but now I'll wait a couple months. Only got 3 grand left till I'm debt free. Not subprime. I got great credit. Just posting shyt.
 
Last edited:

Serious

Veteran
Supporter
Joined
Apr 30, 2012
Messages
72,301
Reputation
12,635
Daps
170,048
Reppin
1st Round Playoff Exits
Paid $12,000 in the past two months. shyt started affecting my credit score in a negative way from paying too much too fast. Was trying to have it all paid off before June hit but now I'll wait a couple months. Only got 3 grand left till I'm debt free. Not subprime. I got great credit. Just posting shyt.
@DEAD7 :damn: at the low key flexing
 

mson

Veteran
Supporter
Joined
Sep 10, 2012
Messages
48,477
Reputation
6,068
Daps
91,829
Reppin
NULL
Paid $12,000 in the past two months. shyt started affecting my credit score in a negative way from paying too much too fast. Was trying to have it all paid off before June hit but now I'll wait a couple months. Only got 3 grand left till I'm debt free. Not subprime. I got great credit. Just posting shyt.


I don't understand how paying too much too fast can negatively affect your credit score.
 

OfTheCross

Veteran
Joined
Mar 17, 2013
Messages
41,794
Reputation
4,711
Daps
95,368
Reppin
Keeping my overhead low, and my understand high

More Subprime Borrowers Are Missing Loan Payments



The share of subprime credit cards and personal loans that are at least 60 days late is rising faster than normal, according to credit-reporting firm Equifax. In March, those delinquencies rose month over month for the eighth time in a row, nearing their prepandemic levels. Rising delinquencies were inevitable following their decline during the pandemic, many lenders and analysts said. Even so, the increase is getting attention from investors partly because the Federal Reserve, facing the highest inflation since the early 1980s, is embarking on what is expected to be the sharpest series of interest-rate rises in years. Higher loan delinquency figures can indicate stress on the part of consumers whose spending is a significant driver of economic activity.

Fears that rising rates will throw the economy into recession have fueled the worst start of the year for stocks in decades. A poor earnings season for major U.S. retail chains has intensified those concerns this week, prompting large declines in major retail shares and sending the Dow Jones Industrial Average to its steepest drop of the year Wednesday. Delinquencies on subprime car loans and leases hit an all-time high in February, based on Equifax's tracking that goes back to 2007. Many people, including those with less-than-perfect credit, paid off debts and built up savings during the pandemic, a surprising outcome considering that lenders at first thought borrowers would default en masse when Covid-19 hit. The government's response, including stimulus payments and child tax credits, boosted many families' financial health.

:yeshrug:


All the Biden bucks is gone, man. We're back to pre-pandemic times.


I don't think this is a cause for concern given as how no one was concerned about this before the pandemic. As I recall, "we had the strongest economy ever" before Covid
 

GnauzBookOfRhymes

Superstar
Joined
May 7, 2012
Messages
10,747
Reputation
2,637
Daps
43,984
Reppin
NULL

Hostile

All Star
Joined
Nov 18, 2016
Messages
2,417
Reputation
745
Daps
4,428
I don't understand how paying too much too fast can negatively affect your credit score.

Paying Off a Loan May Lead to a Temporary Score Drop​

For some people, paying off a loan might increase their scores or have no effect at all. It all depends on your overall credit profile and the type of credit score you're checking.

Here are a few reasons why your score might drop when you pay off a loan:

  • It was your only installment account: Having a mix of revolving accounts (like credit cards) and installment accounts (such as loans) is generally good for your credit scores. If the loan you paid off was your only installment account, you might lose some points because you no longer have a mix of different types of open accounts.
 

Spence

Superstar
Joined
Jul 14, 2015
Messages
12,387
Reputation
2,227
Daps
31,837
I just battened down my own financial hatches as best we could before this storm blows in. As long as I stay employed this year we should make it out fine but it’s def going to be a bloodbath if we get hit with a real recession coupled with high inflation.
 

mson

Veteran
Supporter
Joined
Sep 10, 2012
Messages
48,477
Reputation
6,068
Daps
91,829
Reppin
NULL
they dont get interest that way. my aunt paid off her car when she came into a lump sum after having it only a year and now capital one wont do another car loan with her.
That's some bullshyt!
 

Alix217

Superstar
Joined
Mar 11, 2022
Messages
2,408
Reputation
472
Daps
16,670
giphy.gif
 

Serious

Veteran
Supporter
Joined
Apr 30, 2012
Messages
72,301
Reputation
12,635
Daps
170,048
Reppin
1st Round Playoff Exits
I just battened down my own financial hatches as best we could before this storm blows in. As long as I stay employed this year we should make it out fine but it’s def going to be a bloodbath if we get hit with a real recession coupled with high inflation.
Same I just need to finish summer decently employed then I’ll cruise through this recession.
 
Top