(Current and Future) Demand for Credit Increases for Younger Consumers
March 23, 2016

The Federal Reserve Bank of New York today released results from its February 2016 SCE Credit Access Survey, which provides information on consumers' experiences and expectations regarding credit demand and credit access. The release shows slightly higher application rates compared to the October 2015 release, while the proportion of “discouraged” respondents decreased. Reported rejection rates marginally increased overall, reflecting an increase in credit card application rejections, while rejection rates for other credit types fell. These changes in the application, rejection and discouraged borrower rates were driven primarily by the experiences of younger respondents. The expectations component of the survey generally points to an overall increase in the likelihood of applying for credit, especially for credit cards and auto loans, and a lower likelihood of applying for a mortgage. Respondents are more optimistic about credit card and auto loan applications being approved, while they are more pessimistic about mortgage approvals.


  • The distribution of credit seekers shifted slightly towards increased credit applicants compared to the October 2015 Credit Access Survey. 34.0 percent of respondents applied for credit over the last 12 months and were granted credit (compared to 33.4 percent in October), while 9.0 percent applied and were rejected (compared to 8.3 percent in October). The share of respondents who were too discouraged to apply despite needing credit fell from 6.8 percent in October to 5.8 percent in February, reaching its lowest value since the start of the Credit Access Survey in October 2013. The decline in the proportion of discouraged respondents was primarily driven by those with credit scores of less than 680, and by those 40 years old and younger.
  • Application rates overall increased slightly from 41.7 percent to 43.0 percent, a level not seen since the summer of 2014. The rise 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.
  • The rejection rate per applicant increased slightly from 20 percent to 21 percent, while the rejection rate per application increased from 28 percent in October to 29 percent. The rise was primarily due to an increase in rejections reported by those aged 40 and under (for whom the per applicant rejection rate rose from 21 percent in October to 27 percent).
  • Turning to specific credit types (credit card, credit card limit increase, auto loan, mortgage and mortgage refinance):
    • Application rates increased by one percentage point for credit cards and auto loans, but fell by the same amount for home-based loans. These changes were largely driven by those 40 years old and younger. For example, the credit card application rate for this group rose from 33 percent in October to 40 percent.
    • Rejection rates rose for credit card applications (but are still below their pre-2015 levels), and declined for all other types of credit applications and especially for home loan applications (from 18 percent to 6 percent) and mortgage refinancing applications (from 13 percent to 10 percent), with both reaching their lowest values since the series start in October 2013.
  • The proportion reporting a voluntary account closing or credit limit reduction over the past 12 months was 14 percent, a higher rate than in the previous two surveys, but remaining below the 15 percent to 17 percent range seen before 2015. The share of respondents reporting an involuntary (lender-initiated) credit account closing or a drop in credit limit also increased slightly from 2.5 percent in October to 3.7 percent.


  • The proportion of respondents who report they are likely to apply for at least one type of credit over the next 12 months increased slightly from 29 percent to 30 percent. This increase is driven by an increase in the proportion likely to apply for credit among respondents with credit scores below 680, and younger (age 40 or under) and older (age 60 or over) respondents.
  • The average likelihood of applying for a credit card or auto loan over the next 12 months increased compared to their October 2015 levels, with both increases driven by younger and middle-credit score borrowers. The average likelihood of applying for a home-based loan and a mortgage refinance instead declined, driven by respondents in the middle to high credit score range.
  • The average perceived likelihood of a credit application being rejected, conditional on applying, decreased for credit cards, auto loans and mortgage refinance applications but increased for mortgages applications.

Detailed results are available here.

About the SCE Credit Access Survey

The SCE Credit Access Survey, fielded as part of the SCE (Survey of Consumer Expectations), provides information on consumers' experiences and expectations regarding credit demand and credit access. Every four months, SCE panelists are asked whether they applied for credit in the past 12 months, and the resulting outcomes. They are also asked about their expectations of applying for credit over the next twelve months, and the perceived likelihood of those applications being accepted. We collect this information for five specific credit products: auto loans, credit cards, credit card limit increases, mortgages, and mortgage refinancing. Survey findings (in instances with sufficient sample sizes) are also presented separately by age and self-reported credit score subgroups.

A full set of interactive charts detailing the monthly SCE Credit Access Survey findings can be found at:

More information about the SCE survey goals, design, and content can be found at:

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