A study out Wednesday from credit bureau TransUnion found the majority of consumers kept pace with pandemic-related forbearance payments, even on credit products in accommodation programs.
Consumers who left accommodation programs early were considered a low credit risk, TransUnion also found, and were less likely to seek accommodations again.
The results indicate consumer financial health remained stable during the pandemic, according to Matt Komos, vice president of research and consulting at TransUnion.
Accounts in financial hardship — defined by factors such as a deferred payment, forbearance program, frozen account or frozen past due payment — skyrocketed nationwide as the coronavirus pandemic shuttered workplaces and drove up unemployment.
The passage of the Coronavirus Aid, Relief and Economic Security Act in 2020 significantly increased adoption of these programs by expanding their eligibility, Komos also noted via email.
"There was certainly a segment of financially savvy consumers that were opportunistic and used such programs to help pay down their debt," he said.
Seventy percent of non-prime consumers, those with credit scores from 300 to 660, and 80 percent of consumers with credit scores of 661 and above made payments on hardship accounts within those programs. Forty percent of consumers across credit tiers exited the program within three months.
Consumers shouldn't face any issues by staying in an accommodation program, Komos said, but the guidelines likely vary from lender to lender. Consumer credit scores aren't negatively impacted from a consumer taking advantage of accommodation programs, regardless of how long they used them.
Automotive loans followed similar patterns of other credit products during the pandemic, rising sharply in May 2020 to 7 percent and falling to 2.1 percent in May 2021. The trajectory is a positive sign, Komos said, though he noted the recovery of subprime auto customers has lagged other risk tiers.
"Despite a difficult economic environment, overall serious delinquency rates have not materially increased," he said.