Decline in Delinquencies on Experian Credit Reports

- Sep 2, 2020 Covid-190 comments

The Credit Reports Report Fewer Delinquencies 

 

Another strange thing about Covid-19. While many of us are surviving on a lower income or no income at all, Experian has reported fewer delinquencies on credit reports. A credit card, mortgage, loan, or auto account on your credit report becomes delinquent if you are 30, 60, or 90 days late to pay. Experian reports fewer people than the norm being late on paying their accounts. Therefore, the number of delinquencies of 30, 60, and 90 days late, has gone down, as reported as of August 25.

The Decline In Numbers

 

During January 2020 and June 2020, Experian reported a decline of an average of 2.4% in delinquencies of 30, 60, 90 day late payments. The decline was seen most for the 30-day late delinquency, at an average of 8.7% down since January.

The 30-day delinquency in New York dropped only 1.8%. The lower percentage New York saw is suspected to be due to New York having been hit the earliest and hardest of all states.

Staggering numbers in other states came in above New York; California had a decline for the 30-day delinquency of 8.2%, Texas of 9.7%, Florida of 10.9%, and Pennsylvania of 11.7%.

 

The Reasoning Behind Fewer Delinquencies

 

There are some possible explanations for the fall of delinquencies this past half a year. How can it be there is a smaller percentage of people who were late on paying their accounts when our jobs and financial income were hit so hard?

Forbearance Relief Programs

Due to COVID, many have joined forbearance programs. You usually join a forbearance program by calling the lender of the account, be it the bank, credit card company, mortgage company, and ask them to get you registered. These programs allow you to postpone any payment due on your account from when you enter the program until you exit the program. You would set this up when you hit financial difficult times.  If you do join, then you don’t have to pay anything to your account while you’re part of the program, only once you finish the program. You bypass late payments. If a large percentage of people follow this system, it results in fewer delinquencies overall. you can learn more about forbearance programs here.

Payment Deferred

Payment deferred is when the credit lender of your account agrees to put your account fees on hold until you are financially stable. This would also be set up by contacting your account lender.

Stimulus Relief 

The stimulus relief payment is what we refer to as the one-time payment received by the government during the peak of the virus. The $1,200 check received by all citizens was a great asset to our accounts. This may have been just another factor as to how many of us managed to pay our accounts on time.

Unemployment

As employers have been suspended from their jobs due to the financial hit of COVID 19, these employers are on unemployment insurance instead, and through the CARES Act signed in March, employers received an extra $600 weekly. That’s enough to keep you on your feet and pay your accounts on time.

 

The Delinquencies Going Onward

 

How long will this decrease in delinquencies last? As many of us are now exiting forbearance programs, and stimulus money and bonus unemployment money will come to an end, delinquencies may go back up soon. It’s hard to tell for sure, though as we don’t know how COVID will hit us next.

In the meantime, this has been a really nice side effect of COVID.

 

Was this article helpful?

Rikki Rikki is a full-time contributor for HelpMeBuild.com. She likes to think of the credit world as a place where each credit card is used to its maximum reward capabilities. Other than that, tulips and blue skies are next on the list for a lovely world.

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