In the early months of the pandemic, lenders preparing for a tidal wave of missed payments tightened loan-approval standards, locking riskier borrowers out of the market for new credit. But government stimulus and expanded unemployment payments helped push down credit-card balances and kept defaults at bay. Some 33% of banks reported somewhat easing their credit standards for card approvals during the three months through early October, according to the latest Federal Reserve senior loan officer survey, compared with about 4% a year earlier. “The credit market is now more reminiscent of 2019 — not the early stages of the pandemic,” said Paul Siegfried, credit-card and payments business leader at TransUnion. “Despite the increase in new accounts to subprime borrowers, we have observed that balances for subprime borrowers have remained relatively stable — a sign that consumers are not taking on too much risk.”
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