Consumers Remain Resilient Despite Broader Economic Challenges

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

CHICAGO, Sept. 24, 2020 (GLOBE NEWSWIRE) -- Serious delinquency rates in August improved once more across all consumer credit segments even as the number of people in accommodation programs dropped for the second consecutive month. Despite positive consumer credit performance, TransUnion’s (NYSE: TRU) latest Monthly Industry Snapshot also points to potential challenges in the near future.

During the month of August, serious consumer-level delinquency rates improved for auto loans, credit cards, mortgages, and personal loans. Since the start of the pandemic in March 2020, consumer performance has been mostly positive with continued month-over-month improvements for many of these products.

“A significant percentage of consumers utilized financial accommodations to defer or freeze payments during the early stages of the pandemic. As the first wave of consumers exit accommodation and a period of excess liquidity, they are returning to their debt obligations and continuing to perform,” said Matt Komos, vice president of research and consulting at TransUnion. “Consumers who still remain in hardship could be more likely to face income losses and thus have more difficulty exiting these programs than consumers who may have entered into hardship programs as a precautionary measure.”

August Industry Snapshot of Consumer-Level Delinquency Performance by Credit Product

TimeframeAutoCredit CardMortgagePersonal Loans
August 20201.39%1.23%*1.03%2.53%
July 20201.43%1.37%*1.08%2.79%
June 20201.50%1.48%*1.07%3.11%
May 20201.55%1.76%*1.14%3.14%
April 20201.33%1.87%*1.27%3.27%
March 20201.37%1.96%*1.40%3.40%
August 20191.32%1.72%*1.45%3.08%

*Credit card delinquency rate reported as 90+ DPD per industry-standard; all other products reported as 60+ DPD

The August Monthly Industry Snapshot Report found the percentage of accounts in “financial hardship” continued a downward month-over-month trajectory for auto loans, credit cards, mortgages, and personal loans from the months of July to August. 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.

Across all credit products, the percentage of accounts in financial hardship during the month of August 2020 dipped to pre-May levels. Accommodation programs provided consumers with payment flexibility and added liquidity during the course of the pandemic. However, as the number of consumers leveraging such programs decreases and government relief funds are not expected to renew, many consumers may find themselves at an inflection point.

August Industry Snapshot of Financial Hardship Status by Credit Product

TimeframeAutoCredit CardMortgagePersonal Loans
August 20204.32%2.21%5.92%5.14%
July 20206.16%2.83%6.15%6.92%
June 20207.21%3.57%6.79%7.03%
May 20207.04%3.73%7.48%6.15%
April 20203.54%3.22%5.00%3.57%
March 20200.64%0.01%0.48%1.56%
August 20190.47%0.01%0.86%0.26%

Potential Challenges on the Horizon

While serious delinquency rates continued to decline in August, TransUnion observed some negative movement in 30-day delinquency rates. This metric, which may serve as an early indication that an account will default and potentially be charged off, increased slightly in August 2020 for the two largest payments in the consumer wallet – auto and mortgage.

“This uptick for both products could signify that consumers are starting to roll forward on deferred payments as they come off of hardship programs. However, it’s still much too early to tell. It could simply be a missed or delayed payment that is late by a few days or weeks, though the consumer’s intention is still to make the payment,” added Komos.

Close attention is being paid to delinquency levels as TransUnion’s latest Financial Hardship Survey from the week of August 24th found that COVID-19 continues to financially impact consumers. While the percentage of financially impacted Americans dipped to 52% – the lowest level since the ongoing survey series began in March – the concern among impacted consumers regarding their ability to pay bills and loans remains high (75%).

According to the survey, about one-third of impacted consumers are turning to savings to pay bills or loans and 13% cited they plan to open new credit cards. Despite these concerns, data from the monthly snapshot found that consumers are continuing to make payments as the average credit card balance per consumer dropped to $5,127 in August, compared to $5,686 the previous year. In addition, the average Aggregate Excess Payment (AEP), the average amount consumers are paying over their respective minimum payments, increased to $330 in August 2020, though similar to what was observed at the same time last year ($300).

“Many consumers have continued to make payments even when enrolled in financial accommodation plans. The real litmus test in regards to consumer credit health will become apparent in the coming months when these safeguards begin to expire and consumers have less payment flexibility,” concluded Komos.

TransUnion’s August Monthly Industry Snapshot Report features insights on consumer credit trends around personal loans, auto loans, credit cards, and mortgage loans. Additional resources for consumers looking to protect their credit during the COVID-19 pandemic can be found at

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.

ContactDave Blumberg