Consumers with bruised credit histories are finding the market for lending to loosen up and credit restrictions to thaw out a bit, more lenders are approving borrower loans for bruised and slow pay histories, from auto loans, to personal, payday and even some home loans.

Finally, there seems to be a plethora of opportunities for the average consumer to get access to new car loans without worrying about their less than impressive credit score. This is due to the move by various banks and financial organizations to lower the credit scores as a prerequisite for qualification. This implies that car dealers and manufacturers can be optimistic about increasing sales in the near future. However, there are also questions about whether we are really on the right track as an economy because according to some experts, these lenders by encouraging credit easily, are taking the country back to the times that led to the recession in the first place.

The sales manager at Taylor Chevrolet echoes the sentiments of the market, “There are a lot of lenders now that are into the subprime business. What used to be a good score at a 650 or 700; now 550 is a good score.” The Equifax National Consumer Credit Trends Report shows that the total US car loans reached $52.5 billion which is 49 percent higher than the same period in 2009, which was the lowest point of the recession. Buyers are also benefitting from stretching their payment tenure for a longer period. There are estimates that there will be close to 15 million vehicles sold in US in 2012, a good 30 percent higher than 2009. In other words, car and truck sales are seeing new highs, never witnessed before in these four years.

The representatives at Experian believe that though the auto loan lending scenario is similar to what was prevalent before recession; it is not still the same. Melinda Zabritski, director of Automotive Credit at Experian says, “I think you’ll still see the loans themselves a little more conservative.” As the interest rates are less and since the rate at which banks are lending money to another is close to zero percent, there has been a rise in subprime auto lending.

Who falls into the bracket of subprime consumers?

Those with the credit scores of 640 and below generally fall in the bracket of subprime consumers. Credit scores range between 300 and 850 and the ones below 720 get better credit, because they have a better credit history. The Experian Automotive analysis shows that the average credit score for people who are looking for an auto loan for a new vehicle remained high in the first quarter but for the ones who were seeking these loans for old vehicles, the credit score dropped by six points to 760.

Though subprime lending is approved for auto loans easily these days, they get them at higher interest rates. The consumer still has a choice, which he does not exercise to the fullest. There is always an option for refinancing if there is a problem of high interest rate. There have been examples of people with less than impressive credit scores getting approved for auto loans but at high interest rates, with a sizeable monthly payment to pay. In such cases, non-profit credit unions have come to the rescue by offering refinance options and lowering the monthly payments.