Subprime borrowers are consumers with a credit score of 620 or below.
According to data from Equifax National Consumer Credit Trends Report, first mortgage originations for subprime borrowers showed steady growth in the first three quarters of 2015.
“While there are many characteristics that define a subprime loan, such as the specific terms of the loan and the lender who issues it, credit standards are becoming more accommodating to meet market demand,” says Amy Crews Cutts, chief economist at Equifax. “At the same time, lenders are focusing more attention on evaluating consumers’ ability to repay. This has led to a much larger reliance on third-party data verifications that enable lenders to more accurately vet subprime borrowers much earlier in the origination process.”