Office of Research blog: Score changes during the COVID-19 pandemic | Consumer Protection Agency

Many families found that their finances changed during the pandemic, and these changes were often reflected in their grades. A recent CFPB investigation It found that the distribution of credit scores rose during the pandemic, indicating mortgage foreclosures during the pandemic, federal student loan repayment freezes, and federal spending cuts. it improved the financial well-being of some customers which led to an increase in scores. 1 In this blog, we examine the extension of the score by looking at the score, distinguishing consumer credit score as deep subprime, subprime, near-prime, prime, or superprime. These areas are important to research because many lenders use them to make loan decisions and set loan terms. A high credit score can allow a consumer to get better and cheaper loans, all things considered. We found that the deep subprime and subprime tiers were the most likely to move up, although everyone at the top of the credit score index was also more likely to move up at least once. the condition than before the disease occurred. Forty-three percent of consumers with the lowest credit scores moved up at least one category during the pandemic, but in the ten years before four disease, only 37 percent moved up at least one category.

We used data available at the CFPB to examine consumer changes in credit score categories using a consumer credit score. The data are quarterly figures from June 2010 to June 2022 by the Consumer Credit Panel (CCP). The CCP is a long-term 1-in-48 sample of credit reports from one of the country’s credit reporting agencies. We appointed customers to five goal buckets as with other CFPB projects that reveal bad credit borrowers: Deep Subprime (300-579); Capital (580-619); Near-first (620-659); Prime Minister (660-719); and Superprime (720-850). For each CCP quarter through June 2021, we provided customers with a credit score bucket that reflected their credit score, and a score bucket that reflected eat their score 12 months into the future. These figures show the 12 month changes between the scoring bins. Each number represents the percentage of customer shares that have changed in a specific credit score bin, combined across all CCP segments combined over time. upcoming diseases and illnesses.2 The pre-disease period covers customers in the quarters from June 2010 to December 2019 and the post-disease period covers customers in quarter from March 2020 to June 2021.

Figure 1: Changes in Pre-Pandemic Loans

Source: Authors’ estimates from the Consumer Credit Panel. Each bar represents a customer with a credit score in the category listed on the left and the share that changed to a new category or remained in their current position. first twelve months later. The pre-epidemic period includes consumer credit scores between June 2010 and December 2019.

Figure 2: Changes in Pandemic Credit

Accumulated bar chart representing credit score increases during periods of disease.  Description of the information included in the blog post content.

Source: Authors’ estimates from the Consumer Credit Panel. Each bar represents a customer with a credit score in the category listed on the left and the share that changed to a new category or remained in their current position. first twelve months later. The pandemic period covers consumer purchases between March 2020 and June 2021.


The data compares customer traffic to pre-disease scoring categories. Each bar represents the distribution of credit scores for consumers who were in the credit score range indicated on the left in the previous 12 months. . For example, in the pre-epidemic period, 79 percent of consumers with low scores were in the scoring bin. credit one year later. The remaining 21 percent of these customers moved into the higher score bins, and 16 percent moved into the credit score, four percent moved to the closest to first place, and one percent moved to first place. Shifts out of the deep subprime tier were more common during the crisis, with only 74 percent of buyers remaining in that category one year later. Changes in subprime, near-prime, and prime conditions were more common.

Transitions out of the low financial literacy score also increased during epidemics. Before the pandemic, 37 percent of consumers with credit scores that remained at their lowest level after one year, and 26 percent it fell to an all-time low. These shares fell to 35 percent and 22 percent, respectively, after the pandemic. In addition, the proportion of consumers moving to the first stage increased from 28 percent to 30 percent; in the first place, eight percent to 11 percent; and, at best, from one percent to two percent.

While changes are less severe than borrowers with lower credit scores, consumers with near-prime, prime, or superprime credit scores are less likely to change to a lower credit score. during the disease. Of consumers with near-perfect credit scores, 24 percent moved to a lower level before the outbreak, compared to 21 percent afterward. These shares are 17 percent and 15 percent for customers with high scores, and eight percent and seven percent for customers with high scores. Changes in credit score levels are also increasing. Thirty-seven percent of consumers whose scores were close to high had moved to a high or high score before the disease, but 43 percent of these consumers improved their score during the course of the disease. The proportion of customers with excellent scores that changed in height increased from 27 percent before the disease to 31 percent during the disease.

The improvement of people’s shopping scores during the epidemic, was motivated by customers with deep low and low scores, but customers in any score are more likely to change to a higher level and reduce the change is lower than before. Interestingly, the decline in the segment of consumers with lower credit scores and lower credit ratings is not only due to changes in these categories, but also due to the reduced rates of change in these areas.

Because of the importance of high credit scores in obtaining car loans, mortgages, and other credit products, the increasing number of transitions from low credit score bins explains one of the factors that led to the increase in access to debt during the disease. However, due to the rapid increase in the prices of goods bought on credit—especially cars and house—a higher score may not be enough to balance the price increase. The length of the loan can reduce the payment at the cost of paying more interest, but some customers are still buying.

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