Likelihood of credit approval overtakes pre-pandemic levels

People’s likelihood of securing credit has jumped ahead of pre-pandemic levels, according to research from Experian.

The credit reference agency suggested that the number of people in the UK who have a strong chance of being approved for a credit card is currently 5% higher than it was in March 2020, while people’s chances of being approved for a loan is 6% higher.

Consumers now have a “far wider choice” of financial products, Experian stated, as lenders continue to bring more offers to the market.

This is demonstrated by a 15% increase in the number of credit cards available on Experian’s price comparison service from January 2021 to May 2021. These offers included an increased number of 0% interest balance transfer cards for periods of up to 29 months, with four of these available compared to just one in January 2021.

Furthermore, Experian’s research revealed that enquiries for credit cards and loans have surged since lockdown restrictions began to ease on 12 April. Searches for credit cards jumped 28% in the three weeks since outdoor pubs, shops and hairdressers reopened, while searches for loans saw a rise of 26%.

The analysis also found that applications for loans have increased most among older age groups since the lockdown relaxations started. The data shows a 20% increase in loan applications from those in their 50s, and a 42% increase for those over the age of 60. Experian suggested that a potential driver for this growth is higher spending on home improvement.

“Our analysis demonstrates increased confidence from both lenders and consumers,” commented Experian Consumer Services product managing director, Seb Worbs.

“Consumer eligibility for credit cards and loans is moving ahead of pre-pandemic levels, and it’s interesting to see the increase in older age groups applying for loans. They might be using credit to invest in home renovation projects, or perhaps spend more on their family post-lockdown.

“If you’re looking for a credit card or a loan, now is a great time to search. Lenders are bringing more products to market, and this is improving your chances of being approved for a product of your choice.”

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