Banks are More Lenient Towards Near-Prime Lenders

Wednesday, January 16th, 2013

Today lenders are increasingly offering credit to “near-prime” consumers as they look for ways to increase their bottom line.

It’s a reversal from what it used to be. Banks used to turn away potential borrowers with lower credit scores. The reason of this change is twofold: consumers are getting better at paying their debts, and banks are under pressure to grow their accounts.

Banks broaden the niche of customers they can extend a credit because those who have credit are only a small part of the population. They start extending credits to near-prime borrowers with FICO scores of 660 and below.

There is a tendency amid banks to bunch consumers according to the likelihood they’ll pay back their debts. Consumers with the highest credit scores are considered “prime”. If a borrower has a slightly lower FICO score, somewhere in the 600s, they’re considered “near prime”. Below is a lower tier of higher-risk “subprime” consumers.

Nowadays, lenders tend to look beyond your FICO score when they are trying to decide whether to lend you money. They check some alternative data such as utility bills, cellphone records and rental history.

There are issuers who also pay less attention to some of the older missteps in your past. Instead of looking at three to seven years’ worth of credit history, many focus on shorter time frames of between one and three years, paying closer attention to the most recent year.

The good news is there are a lot of issuers today who are looking for imperfect consumers and give them an opportunity to get back into credit.

Even though the issuers are lending to near-prime borrowers with delinquencies and charge-offs are approaching “historic” lows, they are still very cautious. They still often direct their riskier customers to specialized cards (e.g., secured credit cards) that will help them rebuild their credit records.

Latest Bad Credit Card News

Thursday, February 5th, 2015
When you are looking for a new way to financing, you might want to consider a personal loan instead of a credit card. Personal loan can be an inexpensive way to consolidate debts, ...
Wednesday, December 24th, 2014
Getting rejected for a credit card is always frustrating especially if you are on hard times. However, many banks have a credit card application reconsideration line you can call ...
Friday, October 3rd, 2014
Walmart, the America’s largest retailer, and Green Dot Corp. announced the rollout of GoBank, a checking account product available to almost anyone over 18 who passes an ID check. ...
Sunday, January 5th, 2014
A lot of people are using credit cards nowadays. Ones find credit cards necessary to build credit history. The others cannot imagine their lives without credit cards. Many things ...
Monday, August 13th, 2012
Everybody makes mistakes whether due to confusion or carelessness. And credit card mistakes are the worst and too common ones. Even a tiny slip-up may cause tremendous fallout ...
Best Credit Offer
Click the Compare link to compare the checked cards side-by-side at the comparison table.
Consumer Rating: 4 / 5
Pacific Credit Group Emporium Black Card
Copyright © 2001-2016 BestCreditOffers.com All Rights Reserved.

* The BestCreditOffers.com.com webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. BestCreditOffers.com.com does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the BestCreditOffers.com.com website are property of their respective owners.

BestCreditOffers.com makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that BestCreditOffers.com may be compensated by the credit card issuers when the readers apply for a credit card through this site.

BestCreditOffers.com is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. BestCreditOffers.com does not review or list all available financial or credit offers.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.