GMAC will only lend to credit scores of better than 700

GMAC said yestesrday that it will only start lending money to prime borrowers that have a credit score of more than 700. GMAC said that the new policy is a response to “the lack of stability in the global capital and credit markets.”

According to Sue Mallino, GMAC’s spokeswoman, the finance company is cutting back on retail financing due to the company’s decreasing access to capital and rising costs. In the first seven months of 2008, prime customers with a score of more than 700 represented 74.3 percent of the U.S. auto loan market.

The company also announced that it will suspend sales bonuses for its highest-volume “Platinum” dealers. The bonuses applied to standard-rate contracts without incentives and were only a small part of the mix – each contract accounted for $300 to $400.

Source: Automoitve News (Subscription Required)