By Ben Foldy
In a tough year for the car business, Hyundai Motor Group picked up momentum in 2020, aided by a slate of new sport-utility vehicles that have resonated with American buyers.
The South Korean auto-manufacturing giant, which sells vehicles under two separate companies — Hyundai Motor Co. and affiliate Kia Motors Corp. — expanded its U.S. market share more than any other major auto maker through November and held retail sales steady during the period, defying the broader industry’s 12% drop, according to market research firm J.D. Power.
As investors have lavished attention on electric-vehicle startups, shares of Hyundai and Kia, listed separately on the Korea Exchange, also rallied in 2020, climbing 67% and 49%, respectively, through Tuesday’s close and outperforming other traditional auto makers such as General Motors Co. and Volkswagen AG.
“The market has been down for everyone, but they seem to be the ones coming out of it stronger,” said Vanessa Ton, senior industry intelligence manager at research firm Cox Automotive.
Hyundai and Kia have for years worked to elevate their profile in the U.S., where both started out as budget brands selling to price-sensitive buyers. The two had some success early last decade, redesigning their sedans with new looks and improved fuel economy, helping them boost sales.
But the brands were slow to pivot to SUVs as demand for these vehicles took off, leaving them with sedan-heavy lineups that waned in popularity.
In the past few years, the group’s executives have redoubled their efforts in North America, sharpening their focus on SUVs and trying to move upscale with the launch of a separate luxury brand, Genesis.
When Covid-19 hit the U.S. this year, Hyundai revived a promotion, similar to one introduced during the 2008-09 financial crisis, to reassure buyers worried about the economy. It offered to cover up to six months in payments for buyers if they lost their job because of the pandemic’s impact.
The brands also benefited from fewer pandemic-related disruptions at its factories in Korea, which build many of the models for the U.S. market, and a reputation for selling feature-loaded vehicles at a lower price than rivals, a formula that has given them an edge during economic downturns, executives and dealers say.
“Even though they’ve gone more mainstream and more upmarket, they always try to promote their value,” said Jessica Caldwell, an analyst with car-shopping website Edmunds.com.
Like other car companies, overall U.S. sales for Hyundai and Kia were dented by a big drop in rental-car business. But the decline hasn’t been as steep as the broader industry’s.
Strong retail sales — purchases made by individual customers — helped lift the combined U.S. market share of the group’s three brands to 8.6% through November, up from 7.8% during the same year-ago period and its highest level since 2012, according to research firm Wards Intelligence. Auto makers are scheduled to release year-end U.S. sales results Tuesday.
The two companies also strengthened their pricing by cutting their overall spending on discounts and expanding the appeal of their brands to more- affluent buyers by selling larger, pricier SUVs, analysts say.
The share of Hyundai buyers with a household income of more than $100,000 was 43% this year, up from 33% five years ago, according to data from Cox Automotive. For Kia, that share has jumped to 36%, up from 23%, the firm’s data shows.
“We’re trying to highlight how good our products are as opposed to just selling the deal,” said José Muñoz, Hyundai’s global chief operating officer.
Much of the recent strength has been driven by the release of two new SUVs — the Kia Telluride and Hyundai Palisade — that have won accolades from auto reviewers and remained in high demand throughout the year, dealers say.
The auto-making group has added other SUVs as well in recent years, including subcompacts like the Hyundai Venue, which is designed to appeal to younger and more budget-conscious buyers. Hyundai and Kia now sell about a dozen SUV models in the U.S., up from six nameplates five years ago.
Ryan Gremore, president of O’Brien Auto Team of Illinois, which owns Hyundai and Kia dealerships, said some of the group’s newer models, like the Kia Telluride, are helping change customers’ perceptions of the two brands.
“Consumers haven’t thought of Kia as the ‘bad credit’ brand it was,” Mr. Gremore said.
The challenge now for Hyundai and Kia will be holding on to the recent market-share gains as rivals regain their footing and replenish dealership stock depleted by Covid-related plant shutdowns this spring, analysts say. And executives are still wary of the durability of the market’s recovery.
Past quality problems also continue to dog the two Korean car manufacturers, denting earnings.
This fall, Hyundai and Kia agreed to pay up to $210 million in civil penalties as part of a settlement with U.S. safety regulators, who say the two brands failed to recall 1.6 million older-model vehicles for engine issues in a timely manner.
The two companies together this fall set aside more than 3.6 trillion won, the equivalent of $3.2 billion, to cover expenses related to engine problems on older models, some of which the National Highway Traffic Safety Administration is still investigating after receiving reports of vehicle fires.
Hyundai said it is cooperating with the probe and will work closely to address issues with regulators. Kia, in a statement, denied that it was slow to recall vehicles and said it had settled with regulators to avoid a lengthy legal dispute.
Despite these hurdles, investors have warmed to the stocks, encouraged by the recent strength of the U.S. market and Hyundai’s aggressive push into electric vehicles, analysts say.
In August, Hyundai said it would establish a new subbrand for selling electric vehicles in 2021, with three battery-powered models planned in the next four years. Its stock jumped 15.5% in trading the day following the announcement.
Mr. Muñoz said the company was late on SUVs, but it has learned its lesson and wants to lead on electric cars.
“We don’t want to be fast followers,” he said. “We want to be pioneers.”
Write to Ben Foldy at Ben.Foldy@wsj.com
(END) Dow Jones Newswires
December 30, 2020 05:44 ET (10:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
How to Increase Your Credit Limit
Applying for a new credit card might seem like the perfect solution when you want to manage your spending in a way that works for you.
Be it an intro 0% APR that you’re after, or just more generous rewards on purchases, credit cards let you buy now and pay later, helping you take control of big projects like home renovations and even everyday spending.
As convenient as credit cards are, however, there’s no guarantee that you’ll be approved for the credit limit you want. It can be a let down to submit an application only to receive a credit limit that’s lower than your expectations, and worse — it can put your goals up in the air.
On average, consumers who open a store card may only receive a limit between $2,000 to $2,500, and it can be below $1,000 in some cases, according to Equifax’s Credit Trends report. The average credit limit for general-use cards was higher, averaging between $5,000 to $6,000, but that can still be low for your needs.
Creditors look at a host of factors when deciding your limit, including their assessment of your credit risk, your income level, your credit score and issues they see on your credit report such as high revolving credit card balances, recent inquiries or large loan amounts.
But they take into account a few completely independent factors, too, like how well the economy is doing at the time you applied. There’s no way to predict exactly how much you can expect to be approved for.
It can be disappointing to get a low credit limit, but you’re not entirely without options. After a few months, consider asking for a credit limit increase on your new card, or you can request a higher limit on a card you’ve had for a while.
Here’s a breakdown on how credit limit increases work and how you can request one.
Credit limit increases can happen automatically for longstanding customers on occasion, or you can manually request one if you’ve only been a customer for a few months.
Card issuers are known to automatically increase cardholders’ credit limits from time to time (with no effect to your credit score), especially if you keep your income information up-to-date and have a good payment history.
However, not everyone will receive an automatic increase. And even if you get a higher credit limit, you may not receive the increase you need. It can therefore be a good idea to ask for a larger credit limit yourself.
Before you get started on your request, consider the three qualifications:
- You generally need to be a cardholder for at least three months.
- You typically can only request an increase once every six months.
- Card issuers may review your credit report if you request a specific credit limit.
These rules may not be an issue for you, but if you have bad credit or your score is under review (you’re in the mortgage process or applying for a new apartment, for instance), consider holding off on submitting a credit limit increase to preserve your credit score (we explain why below).
When you’re ready to ask for a credit limit increase, you’ll have the option of completing the request online or over the phone. You can submit the request via your card issuer’s mobile app or by logging into your online account.
Another option is to call customer service and ask for an increase. This option gives your request a personal touch and allows you to explain your reasoning why you need a larger credit limit and give reassurance that you can repay it. Discussing a recent raise or a longstanding, positive relationship can help strengthen your chances of getting an increase.
Requesting a credit limit increase may ding your credit score a few points if the card issuer pulls your credit report. It’s key to check the online form or ask the rep if your credit report will be reviewed.
Before starting your request, gather this information:
- Annual income
- Employment status
- Monthly housing payments (rent or mortgage)
- Desired new credit limit, which some issuers let you input during the request
You can typically expect to receive an instant decision on whether your credit limit increase is approved or denied.
If your request was denied, you may need to wait up to six months to try again. While you wait, aim to raise your credit score through on-time payments and boost your income, so you can strengthen the chance you get approved next time. You can also improve your credit score through free services like Experian Boost™, which allows you to get credit for on-time phone, utility and streaming service payments.
On Experian’s secure site
Average credit score increase
13 points, though results vary
Credit report affected
Credit scoring model used
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
How to Buy a House With Bad Credit: Guide for 2021
Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”
Having bad credit makes it harder to get a mortgage. A low credit score makes you look riskier to lenders; it suggests you might be financially unstable or unwilling to repay your debts.
A poor score, however, can also simply be the result of not knowing how the scoring process works or having gone through a brief rough patch that required you to take on debt.
If you think you’re ready for homeownership despite your bad credit, here’s what you need to know:
What counts as a bad credit score?
How do you know if your credit is bad? Once you know your score, see where it falls in the ranges below:
- Poor (less than 640): Lenders consider borrowers in this credit score range to be high risk. Having poor credit means you probably won’t qualify for a conventional mortgage, but you might be able to get a government-backed home loan.
- Fair (640 to 699): Lenders see borrowers in this credit score range as less risky. You might have less debt or a stronger payment history than borrowers with poor credit. You can qualify for a conventional mortgage with fair credit, but you might need to be stronger in other areas to make up for it, and you could be saddled with a higher mortgage rate.
- Good (700 to 749): With good credit, you’ll have a much easier time qualifying for a mortgage and getting a low interest rate. You’ll probably secure offers from more than one lender.
- Excellent (750 and above): An excellent credit score demonstrates your ability to manage debt. You consistently make your payments on time and don’t use too much of your available credit. Combined with a steady income, you’ll qualify for a mortgage from multiple lenders and have the luxury of choosing the least expensive option.
While potential borrowers with poor credit will find it challenging to get a home loan, it can be done. You just need to learn about the options available and how lenders will look at your application.
Credit score needed to get a mortgage
While your credit score is an important factor in your home loan eligibility, it’s not the only one. Here’s what else lenders care about:
- Down payment: Depending on the loan and the lender, you’ll need a minimum of 0% to 5% down.
- Debt-to-income ratio: Typically, you want a debt-to-income ratio of 36% or less when applying for a mortgage. In most instances, it can’t total more than 45% to 50% of your income.
- Cash reserves: You might need up to six months’ worth of mortgage payments in the bank with a low credit score and/or low down payment.
Minimum credit score by loan type
|Loan type||Min. credit score|
|Conventional||A home loan not insured by the federal government||620|
|FHA||Government-insured mortgage for borrowers with low credit scores||580 |
(with 3.5% down; 500 with 10% down)
|VA||Government-backed mortgage for military service members (including qualified reservists) who meet length and character of service requirements, and their unmarried surviving spouses||None|
(though individual lenders might impose limits)
|USDA||Government-insured home loan for low- and very-low-income applicants in eligible rural areas||None|
What having bad credit means for your mortgage rate
The lower your credit score, the higher your mortgage rate, all else being equal. If you have poor credit, expect to pay at least 1.5% more than someone with excellent credit.
The result will be a higher monthly mortgage payment and a higher long-term borrowing cost.
Assuming you’re able to secure a loan with bad credit, you won’t necessarily be stuck with the same rate forever. It might be possible to refinance to a better rate after improving your credit score.
Learn More: What Is a Mortgage Rate and How Do They Work?
How to get a mortgage with bad credit
You might already be able to get a mortgage despite your bad credit. For example, if your score is at least 580, you can put down just 3.5% and get an FHA loan.
However, working to improve your score and other aspects of your finances gives you more options and can save you money. Follow the steps below to increase your chances of getting a mortgage:
1. Keep an eye on your credit
It’s never been easier to get a free copy of your credit report. You can receive a free copy of your credit report from each of the three national credit reporting agencies at AnnualCreditReport.com.
Analyze your reports to make sure all the information is accurate. If you find a mistake that could be weighing down your score, dispute it with the credit bureau or with the company that reported the incorrect data.
Check your score weekly as well. This allows you to see how your financial activity is affecting your score. If it’s moving in the wrong direction, frequent checks will help you take quick corrective action.
2. Pay your bills on time
Payment history is the most important factor that determines your credit score, making up about 35% of it.
Make sure all your credit card, auto loan, and other debt payments post to your account by the due date to boost this part of your score.
3. Work on paying down debt
How much you owe makes up 30% of your credit score. Specifically, your credit score evaluates your balance relative to your available credit, often referred to as your credit utilization ratio. The lower that ratio, the better.
For example, your score will look better if your balance on a $5,000 credit line is $500 (10% utilization) instead of $2,500 (50% utilization).
If you rack up a high credit card balance one month, try to pay it down before your next statement is issued to keep your credit utilization down on your credit report.
4. Stay away from hard credit inquiries
Applying for a loan or credit card will usually ding your credit score if the creditor conducts a hard credit inquiry.
Credible lets prospective homebuyers shop for rates without impacting their credit scores. We’ll show you actual, prequalified rates from our partner lenders — our process is secure and simple, and it only takes a few minutes to complete.
Opening a new account — or closing an old one — will also decrease the average age of your accounts, a factor that accounts for 15% of your credit score.
There are situations, however, where the benefit of applying for new credit might outweigh the impact on your credit score.
One example of this is transferring high-interest debt to a lower-interest card, which could help you pay down debt faster.
5. Consider a rapid rescore
If you’re in a hurry to boost your credit score, a rapid rescore might help. Normally, your credit report and score get updated each billing cycle.
This means that after you pay down a credit card balance, for example, your new credit utilization rate might not be reflected in your score for up to a month.
Rapid rescoring can speed up the change to your credit score. Your lender might recommend it if you’re close to having a good enough score to qualify for a loan or better rate.
Keep Reading: Credit Score Needed to Get a Home Loan
6. Save up for a larger down payment
A larger down payment gives you more skin in the game, which makes you look less risky to lenders. It also means you won’t need to borrow as much.
If your income is too high to qualify for other low-credit-score conventional loan programs such as Fannie Mae’s HomeReady, you may still qualify for a conventional loan with a credit score of 620. You’ll need to put 25% down and your debt-to-income ratio must be 36% or less.
In this case, you won’t have to pay for private mortgage insurance. Your monthly mortgage payment will be smaller and your long-term interest expense will be lower. So, while you’ll pay more up front, you’ll pay less each month and over time.
7. Bring on a co-signer
A co-signer whose credit is better than yours could help you get approved for a mortgage or lower interest rate.
However, they will be taking on a huge responsibility: the obligation to pay your mortgage payments if you default. If they can’t, their credit score will be impacted.
In other words, a co-signer must put their savings and their credit reputation at risk to help you. That’s a big ask.
8. Consider a loan type with less stringent credit requirements
As we’ve noted, FHA loans have low credit score requirements. VA loans and USDA loans technically don’t have a minimum credit score requirement. However, these two loan types do have stricter eligibility requirements:
- VA loans: Only available to military service members who meet length and character of service requirements, and their unmarried surviving spouses
- USDA loans: Only available to low- and very-low-income applicants in eligible rural areas
9. Shop around to find the best offer
Even with poor credit, you should shop around to find a great mortgage rate. With Credible, you can check prequalified rates from multiple lenders for free, all on one platform.
You might be eligible for better rates than you think. And if you’re not, you now know the steps to get your score into better shape.
Get started today by checking out the table below, and see what rates you prequalify for from our partner lenders.
More accountability among council proposals for Akron police
Akron City Council wants more resources for the city’s only independent police auditor and more public access to police records, from use of force reports to citizen complaints and logs that track the race of everyone stopped by police.
Those are among the recommendations to be released publicly on Monday by council’s special committee on Reimagining Public Safety. Members are trying to answer a community call for a police force that better reflects the demographics and lived experiences those it serves and protects following the police killing of George Floyd in Minnesota last year.
There would be no age limit for police cadets, which the city recently upped from 35 to 40 years. A new “Pathway to Law Enforcement” would ask community and education leaders to steer young adults into careers with the city and the Akron Police Department.
More so than they do now, social workers would help police handle 911 calls involving mental health and addiction. Officers would spend more time walking or biking their beats in an effort to build trust and understanding with the neighborhoods they police.
And council would keep up with the latest in law enforcement technology as city police deploy drones or consider feeding camera footage into crime-solving software that can scan faces and license plates, which would prompt leaders to weigh public safety against personal privacy.
Council President Margo Sommerville will present the full list of recommendations and special committee findings during council’s regular public meeting Monday. The 22-page document is the culmination of 22 subcommittee meetings, each averaging about an hour.
But the report is not the end of the road to “Reimagining Public Safety,” Sommerville explained. The end goal is “more equitable” policing systems and stronger bonds between police and the policed.
As he searches for a new police chief, Mayor Dan Horrigan and his deputy mayor for Public Safety, Charles Brown, express agreement with council in recognizing the best elements of policing in Akron while considering improvements outlined in the listed recommendations.
Next, Sommerville said council will take its newfound knowledge of policing in Akron to the public and rank-and-file officers.
University of Akron President Gary L. Miller said he’s honored and excited that council has asked his faculty and students to develop a community engagement process of surveys and virtual town hall meetings. The information gathering process will solicit feedback from residents, officers and the police union, which as an organization was not given an opportunity to address council’s special committee.
“We know at the end of the day, when we really begin to finalize these recommendations, we’re going to need the Fraternal Order of Police (Lodge #7),” Sommerville said, pinning successful implementation of any reform or enhancement on the commitment of everyone impacted.
FOP President Clay Cozart will see the recommendations Monday. While continuing to disagree with the prominence given to police reform in the wake of Floyd’s death, Cozart said he’s watched every minute of the 22 meetings discussing the work of his members, and he appreciates Sommerville’s willingness to work with the union.
Informed by Akron police officers serving as “liaisons,” the special committee involving every member of council broke out into four working groups.
The Accountability and Transparency group, which met seven times, delved into issues of external oversight, officer discipline and public access to records, drawing on the expertise of police auditors, civilian review board members and national experts on the subject from coast to coast.
“In our society, we entrust police with the critical responsibility of protecting public safety, including by using force, if necessary,” the working group concluded. “External oversight recognizes that the seriousness of this delegated power requires particular scrutiny in order to ensure that the rights of the public are protected. On both a national and local level, historic injustices have created a trust deficit in how the public, particularly communities of color, interact with law enforcement, and government more broadly. Community trust is essential for effective policing.”
The group settled on two formal recommendations:
- Give Akron Police Auditor Phil Young, who answers to the mayor, a role codified in city law with “sufficient authority to access information, adequate staffing and funding and independence from the political process.”
- Ensure “that more police data and information is made publicly-available online and updated on a regular basis.”
The prevention working group discussed community policing and best practices around responding to mental health, addiction and other 911 calls that can end tragically for officers and citizens.
While identifying funding as the greatest barrier to more robust training, the group recommended that every officer undergo Crisis Intervention Team training. Currently, 76% of officers lack the 40-hour training.
To “help solidify stronger relationships between police officers and the communities they diligently patrol and serve,” the group also recommended more walking and biking for beat cops, something previous councils and mayors have tried to achieve.
The final recommendation recommended a shifting, or at least sharing, of the burden of solving society’s problems, which armed officers encounter daily.
There’s some appetite for the concept, even among officers. Police1, an online source of information and resources for law enforcement, surveyed 4,000 American officers for a special report called “What Cops Want in 2021.” Officers named serving their community as the top reason for becoming officers. They also ranked the types of 911 calls they’d rather see other agencies handle: housing for homeless people (93%), animal control (88%), nuisance abatement (64%), parking enforcement (61%) and dispute mediation (53%), responding to mental health crises (45%) and drug overdoses (29%).
“Throughout our working group meetings, there was a continuing discussion of whether it may be appropriate for social service agencies to respond to some 911 calls relating to mental health or other issues, the idea being that a social service-focused approach might be more effective in some cases, and could also free up APD to focus on issues that clearly need a police response,” the group concluded. “Our APD liaisons made clear that they believe there should be a police response to all calls, as situations are fluid and could endanger non-police responders.”
We also heard from the Police Chief in Alexandria, Kentucky, a small city south of Cincinnati, who described a program in which the department employs two social workers, who follow up on calls (and in some cases respond to calls where the scene is deemed safe).”
The group heard from a Kentucky police chief who sends social workers out on many calls, sometimes without an armed officer. They said Akron, as a community, should involve more social service providers on 911 calls, when “appropriate,” and expand programs where counselors and health professionals follow-up after the fact.
Personnel and culture
A third committee tackled hiring and staffing as commanders must take officers from their patrols to fill specialized units like Neighborhood Response Teams — the backbone of community policing in Akron — or Quick Response Teams that respond to overdoses.
The group recommended more ongoing training and identified potential problems with hiring like not testing for steroids in the screening process because it costs twice as much or disqualifying applicants because they have or lie about a history of bad credit or minor drug offenses.
To get a more diverse and broader pool of candidates, the group recommended abolishing the current 40-year maximum age for cadets, as other large cities have done.
They also recommended bringing back an Akron Urban League program that prepared candidates for the city’s civil service exam and the creation of a Pathway to Law Enforcement program.
The Pathway program would use neighborhood “figureheads” and public educators to recruit 18 year olds and hold their interest in becoming cops until they turn 21 and are allowed by state law to carry a firearm as a civil servant. For a couple years, they would get city jobs dealing with the public while earning criminal justice credentials through UA or Stark State.
The group added two suggestions: APD should update its mission statement “to include the need for a workforce that reflects community and the need for diversity” and bring in an outside group that would take confidential and “unvarnished opinions” of officers “that could provide constructive feedback for further institutional change.”
Technology and equipment
No formal recommendations, aside from getting a body-worn camera for every officer who interacts with the public, came out of the technology and equipment committee.
This last group learned about policing gadgets and systems like unmanned aerial vehicles (drones), “less-lethal” weapons (tear gas, pepper spray, tasers) surplus military rifles and body-worn cameras.
City information technologists informed them of existing software that allows detectives to stake out drug houses or solve crimes by accessing 277 cameras mounted around the city on buildings, lights and traffic poles. The footage is recorded 24/7 and kept for 21 days. And they discussed emergent technology like Briefcam, a program of computer algorithms that scans faces and reads license plates then automatically generates turn-by-turn video of stolen cars or suspects.
“Going forward, it will be important to gauge public opinion about how cameras in public spaces should be used,” the committee cautioned. “With Ring doorbells and other consumer camera systems becoming ubiquitous, it may be that the public is willing to accept greater surveillance by police within public spaces. Still, there should be transparency and clear rules on what is and is not permitted.”
Reach reporter Doug Livingston at email@example.com or 330-719-1756
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