UPDATE 2-GMAC to limit car loans to buyers with good credit

(Recasts, adds details on loans, company and analyst comment, background on sales and byline)

By Poornima Gupta

DETROIT, Oct 13 (Reuters) - GMAC, the finance company affiliated with General Motors Corp (GM.N: Quote, Profile, Research), said on Monday it would pull back from riskier and longer-term auto lending in response to tight credit conditions that has limited its access to funds.

GMAC said it would be more conservative in extending car loans, restricting them to U.S. consumers with good credit and to shorter terms.

"The changes include limiting purchases to contracts with a credit score of 700 or above," GMAC said in a statement. "These changes in pricing and underwriting are related to the current market environment, which has reduced access to funds and increased the cost of funds."

The company said it expects the restrictions to remain in place until credit markets stabilize.

GMAC also said it has increased the rate it charges car dealers for providing standard auto financing by 75 basis points.

A GMAC spokeswoman said the company was taking the steps because of tough economic conditions.

"In general, it's clear that the U.S. consumer is continuing to feel stressed," she said. "What we are seeing in the marketplace today is unprecedented."