More Good News About Credit Patterns for Chicago Homebuyers

foreclosures in IllinoisThe credit experts at the
Equifax Personal Finance Blog are calling 2011 a “
slate…wiped clean…a fresh start, a new day.” That’s according to a recent post called, “Economy 2011: Credit Patterns Show Signs for Improvement in 2011.” What could be better news for owners of Chicago real estate?
Some of the good news comes in the form of loan originations. Surprisingly, even home equity lines of credit were on the increase, with more reported in October 2010 than the previous October. This was the first increase in home equity lines since Equifax began tracking them in 2006.
Credit cards offer another sign of hope. Equifax reports that in late 2008 through all of 2009, credit card issuers were closing cards to manage their level of future risk. In other words, the more unused funds there were available to their card holders, the greater the lenders’ risks. They started closing accounts of high risk card owners and even some that weren’t high risk. In the worst part of the recession, some 108 million cards were closed, compared to 66 million cards in the preceding year.
The card closing stage seems to be behind us, according to the Equifax experts. Now, the number of new cards has increased for several months in a row. Many of these cards are going to subprime, or higher risk, borrowers. Equifax expects to see card balances increase in 2011, too. That means people are spending more, and they’re more optimistic about the economy.
The leading indicator in all of this is an increase in new auto loans, which were up 17 percent year-over-year in October 2010. You can read all about the auto loans and other indicators at the
Equifax Personal Finance Blog. But you may want to sit down. We’ve been waiting for news like this for a long time, and it’s hard to believe it’s finally here!