Read on Twitter
@CFPB just issued a research report on COVID-19’s impact on consumers’ credit reports. Finally! Finds that delinquencies did not increase during March thru June. No shock, credit bureaus have put out similar data. But some interesting tidbits - a thread https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-examines-pandemic-impact-on-consumer-credit/
First, the data is thru June 2020 and @CFPB notes “The analysis presented here overlaps with the timing of substantial assistance provided to consumers through the CARES Act and other federal, state and local programs.” TL; DR giving people $$$ protects their credit score
Indeed, even CFPB admits “Absent these programs, the trends observed in this report may have differed substantially between March and June of 2020." So with $600 federal UI benefit ended and the EIP long spent, the data in a few months may look much worse
Also – mortgage forbearance "[a]ssistance was more likely to be reported for borrowers residing in areas with more COVID-19 cases, with majority-Black or majority-Hispanic populations, and with larger changes in unemployment.... "
Makes sense – Black & Latinx communities were hard hit by COVID-19 and also suffered the worst unemployment. The pain is all correlated.
Final observation – the report did not examine debt collection items, the primary way that medical debts, back rent & utility debts show up. These will take some time to be appear. But health insurance losses due unemployment & mass evictions may mean we’ll see lots of these.
