Auto Loan Rejection Rate Nearly Doubles in 2019: Fed Survey

The application rate for credit cards remained stable on average in 2019 compared to last year, at 27.5%, while the application rates for credit card limit increases rose by 0.6% in 2019 to an average of 12.7%, the fed survey reported.

The share of respondents who were too discouraged to apply for credit over the past 12 months despite needing it, was 6.4% on average in 2019, just slightly above the 2018 average of 6.3%.

The proportion of respondents who applied and were granted credit over the last 12 months increased 1.2% to 37.7% on average in 2019, while the proportion of respondents who applied for credit and were rejected declined from 9.1% on average in 2018 to 8% in 2019.

Since June 2019, this reading has held steady at 8.3%, the Fed survey said.

The proportion of respondents who reported they are likely to apply for at least one type of credit over the next 12 months increased from 25.6% in 2018 to 26.8% in 2019. In fact, the average likelihood of applying for each specific kind of credit over the next 12 months increased this year compared to last year.

The survey also provided mixed evidence on what it called the subjective financial fragility of U.S. households.

While the average probability of needing $2,000 for an unexpected expense in the next month increased from an average of 32.9% in 2018 to 33.6% in 2019, the average probability of being able to come up with $2,000 if an unexpected need arose within the next month increased from 68.6% on average in 2018 to 69.8% in 2019.