Americans see growing risk they’ll get turned down for loans
The perceived likelihood of being rejected increased across different forms of credit, from cards to secured loans to buy homes and cars.

A growing share of US consumers say they’re not seeking loans because they expect to be refused amid tight credit conditions, according to data from the Federal Reserve Bank of New York.
The share of discouraged borrowers, defined as respondents who said they needed credit but didn’t apply because they didn’t expect to get approved, climbed to 8.5% in the New York Fed’s latest Survey of Consumer Expectations. That’s the highest level since the study began in 2013.
The perceived likelihood of being rejected increased across different forms of credit, from cards to secured loans to buy homes and cars. Roughly one-third of auto loan applicants expected to get turned down, the highest share since the start of the series, while nearly half of all respondents in the February survey said it’ll be harder to get credit in a year’s time.
The data adds to a picture of increasingly fragile household finances for many Americans, as a cooling job market slows wage gains while high borrowing costs are making bills harder to pay. Delinquency rates remain low by pre-pandemic standards but they’ve been edging higher in most categories, and lenders are turning cautious.
More than four in 10 US homeowners who sought to refinance their mortgages had their applications rejected, according to the February survey, quadruple the share in October 2023.
With mortgage lending rates still much higher than a couple of years ago, many people seeking a refi are likely trying to tap equity accumulated during the recent housing boom in order to meet other debt costs or expenses, rather than to reduce their monthly payments. Inability to do so could put some under pressure to sell their homes.
Meanwhile, the share of consumers in the New York Fed survey who said they could come up with $2,000 in the event of an unexpected need declined to 63%, a new series low.
This story was originally featured on Fortune.com