Performance in the Consumer Credit Market Holds Steady as Number of Borrowers in Financial Hardship Status Stabilizes

TransUnion’s June Monthly Industry Snapshot Report sheds light on consumer credit trends during the pandemic

CHICAGO, July 23, 2020 (GLOBE NEWSWIRE) -- A new TransUnion (NYSE: TRU) consumer credit snapshot found the percentage of accounts in “financial hardship” started to level off for credit products such as auto loans, credit cards, mortgages and personal loans during the month of June 2020. Some of this leveling off was due, in part, to accounts coming out of financial hardship status in June.

Accounts in financial hardship – defined by factors such as a deferred payment, forbearance program, frozen account or frozen past due payment – have largely kept delinquency numbers in check as consumers continue to navigate the ongoing impacts of COVID-19. TransUnion’s financial hardship data includes all accommodations on file at month’s end, and includes any accounts that were in accommodation prior to the COVID-19 pandemic.

Accommodation programs have provided consumers with much needed payment flexibility as external triggers such as rising unemployment and a decrease in government relief funds have started to shape the future outlook of the consumer wallet.

June Industry Snapshot of Financial Hardship Status by Credit Product
Timeframe	Auto	Credit Card	Mortgage	Personal Loans
June 2020	7.21%	3.57%	6.79%	7.03%
May 2020	7.04%	3.73%	7.48%	6.15%
April 2020	3.54%	3.22%	5.00%	3.57%
March 2020	0.64%	0.01%	0.48%	1.56%
June 2019	0.40%	0.02%	0.47%	0.26%

“In the early months of the pandemic, unemployment benefits and relief from the CARES Act gave consumers a bit of a cushion, leaving the consumer fairly well-positioned from a cash flow perspective,” said Matt Komos, vice president of research and consulting at TransUnion. “Lenders have been working with consumers during this time of uncertainty by extending financial hardship offerings that help them understand and manage their financial situation. These accommodations have been working as intended and have helped thwart a material breakdown in delinquency performance in the near-term.”