Percentage of Consumers with Financial Accommodations Remains Elevated
TransUnion released its Financial Services Monthly Industry Snapshot Report on January 26, 2021, noting that 2.87% of accounts in auto, credit card, mortgage, and personal loan sectors remained in financial hardship as of December 2020. This marks a decline from a peak of 4.77% in May 2020, though the rate of decline has slowed recently. The company introduced the CreditVision® Acute Relief Suite, aiming to aid lenders in effectively managing consumer accounts and adapting to changing repayment preferences, highlighting the need for lenders to better understand their customers' situations.
- The percentage of accounts in financial hardship decreased from 4.77% in May 2020 to 2.87% in December 2020.
- Introduction of CreditVision Acute Relief Suite enhances lender support for consumers with loan accommodations.
- Consumer research indicates diverse repayment preferences, allowing lenders to tailor strategies.
- The pace of decline in financial hardship status has slowed in recent months.
- Ongoing financial hardship remains elevated with hundreds of thousands of consumers still affected.
TransUnion offers solutions to help lender-borrower dynamic
CHICAGO, Jan. 26, 2021 (GLOBE NEWSWIRE) -- TransUnion’s (NYSE: TRU) latest Financial Services Monthly Industry Snapshot Report finds that approximately
TransUnion’s financial hardship data includes all accommodations on file at month’s end and includes any accounts that were in accommodation before the COVID-19 pandemic. While the percentage of accounts in this status has decreased, the declines have slowed in recent months.
Furthermore, TransUnion consumer research has found that repayment preferences vary among surveyed consumers with loan accommodations. For instance, approximately
Accounts in Financial Hardship Status Declining, but Still Elevated
| Date/Credit Product | Auto Loans | Credit Cards | Mortgages | Personal Loans |
| December 2020 | ||||
| November 2020 | ||||
| October 2020 | ||||
| Peak Level* | 7.21% | 3.73% | 7.48% | 7.03% |
| March 2020 |
*Note that peak levels for auto loans and personal loans took place in June 2020 and in May 2020 for credit cards and mortgages.
To better assist the lender-borrower dynamic, TransUnion has introduced the CreditVision® Acute Relief Suite. The Suite enhances support for consumers with accommodations, allowing lenders to develop effective customer management strategies across the account lifecycle. It also affords consumers more opportunities to work with their lenders to ensure they can repay their loans when coming out of accommodation.
“There are still hundreds of thousands of consumers in some form of financial hardship status, and the more lenders can do to understand their customers’ financial situations, the better they can assist them and build trustworthy, long-lasting relationships,” said Jason Laky, executive vice president and head of TransUnion’s financial services business. “We’ve worked with many lenders in the past six months to ensure they are identifying and supporting consumers who may need financial help. As we begin 2021, and accommodation programs begin to expire in March and April, these insights will be especially beneficial to lenders and consumers alike.”
The CreditVision Acute Relief Suite features trended credit attributes that identify credit relationships and payment behaviors for consumers previously or currently in relief status during acute economic conditions.
The Suite provides lenders and insurers with greater access to critical insights that improve their ability to understand how consumers and their accounts have been impacted. It includes details broken out by different credit products, the timing of when the accounts were reported in these statuses, and the balances of those accounts.
“These are challenging times that call for innovative strategies. The effective use of solutions combined with approaches already set forth by businesses and lenders will be major determining factors for enabling a thriving consumer credit market and empowering economic opportunity for consumers in 2021,” concluded Laky.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.®
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences, and personal empowerment for hundreds of millions of people.
http://www.transunion.com/business
| Contact | Dave Blumberg TransUnion | |
| dblumberg@transunion.com | ||
| Telephone | 312-972-6646 | |
FAQ
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