Consumers are looking for more access to credit but are having a slightly tougher time getting it compared to six months ago, the Federal Reserve Bank of New York  announced Wednesday.
The New York Fed’s latest SCE Credit Access Survey , which looks at consumers' experiences and expectations regarding credit demand and credit access, showed higher overall credit application rates in February than last October, while at the same time showing marginally higher rejection rates for credit cards and less interest in mortgage applications. While respondents reported being more optimistic about credit card and auto loan applications being approved, they were more pessimistic about getting mortgage approvals.
According to the survey, credit application rates overall increased from 41.7 to 43 percent in February, a level not seen since the summer of 2014. The rise, New York Fed reported, was driven by a notable increase in the application rate of respondents under age 40, which rose from 49 percent in October to 55 percent last month.
Over the last 12 months, the survey found, 34 percent of respondents applied for and were granted credit, compared to 33.4 percent in October. At the same time 9 percent applied and were rejected, compared to 8.3 percent in October. However, the share of respondents who felt too discouraged to apply, despite needing credit, dropped a full percent, from 6.8 percent in October to 5.8 percent in February, the lowest since the start of the Credit Access Survey in 2013.
Rejection rates rose for credit card applications but declined for all other types of credit applications, especially for home loans. Those, according to the survey, fell from 18 to 6 percent, while mortgage refinancing applications fell from 13 to 10 percent) between October and February. Both were at their lowest values since October of 2013.
The overall rejection rate per applicant for all types of credit increased from 20 percent in October to 21 percent last month, while the rejection rate per application increased from 28 to 29 percent during the same period. New York Fed attributed the uptick mainly to the pool of 40-and-under applicants, for whom rejections jumped from 21 percent in October to 27 percent in February.
Lastly, while New York Fed found that the likelihood of applying for a credit card or auto loan over the next 12 months is up compared to their October levels, the likelihood of applying for a home-based loan and a mortgage refinance is down, despite that the likelihood of being rejected is for credit cards, auto loans, and mortgage refinance applications is lower. It is, however, higher for mortgage applications.