Even when finance companies helped their customers with installment payment accommodations during the worst of the pandemic, providers oftentimes still saw funds following into their collection baskets.

That’s one of the conclusions from a new TransUnion study that found the majority of consumers continued to make payments on their accounts even when in an accommodation program.

TransUnion reported this week that enrollment in financial hardship programs grew significantly as a result of the COVID-19 pandemic to approximately 7% of all accounts for credit products such as auto financing and mortgages.

The study also showed that seven in 10 non-prime consumers and eight in 10 prime and above consumers made payments on hardship accounts while they were enrolled in such programs.

Additionally, analysts discovered more than 40% of accounts in these programs exited within the first three months of entering.

TransUnion explained that accounts in financial hardship — defined by factors such as a deferred payment, forbearance program, frozen account or frozen past due payment — have provided consumers with much-needed financial relief during the ongoing impacts of COVID-19.

While accommodation programs of various forms have been around since before the pandemic, expanded eligibility criteria under the CARES Act in March 2020 increased the reach of consumers who accessed hardship assistance, according to TransUnion.

“Traditionally, enrollment in a financial hardship program signified heightened consumer risk,” said Jason Laky, executive vice president of financial services at TransUnion. “In the era of COVID-19, however, the consumer makeup of those accessing hardship programs has been much more diverse in terms of credit profiles.

“As situations have stabilized, we’ve found that consumers who exhibited key credit behaviors within the first three months of accessing an accommodation program performed well over the long-term,” Laky continued in a news release.

TransUnion pointed out that the total percentage of accounts in “financial hardship” status showed a considerable increase from March to May of last year in the early months of the pandemic.

However, TransUnion’s May 2021 Consumer Credit Snapshot shows accounts in financial hardship status have dropped significantly compared to one year ago.

Accounts in Financial Hardship Status Down Markedly from Early Stages of the Pandemic

Percentage of Accounts in
Financial Hardship




Auto Loans







Credit Cards














Unsecured Personal Loans







Source: TransUnion

TransUnion said consumers leveraged hardship programs during the pandemic due to varying financial concerns and issues they faced. As a result, TransUnion studied early consumer credit behaviors upon hardship entry to determine whether these behaviors were predictive of better future credit risk performance.

The length of time consumers stayed enrolled in a hardship program was a key signifier of risk level, according to analysts.

TransUnion explained consumers that were deemed “early exiters” (those who exited on all of their hardship accounts by month three) were lower risk than those who were enrolled in the programs for a longer period.

Analysts said consumers who exited early were also less likely to experience continued struggles and leverage financial accommodations again.

Roughly 80% of these early exiters stayed out of hardship programs nine months later, according to TransUnion’s findings. Analysts determined this trend was consistent across all risk tiers, but prime and above hardship consumers performed exceptionally well and showed a significantly lower delinquency rate if they exited the hardship program early — especially compared to non-prime early exiters where the future performance difference was less pronounced.

Analysts said prime plus consumers who made payments, exited the hardship programs early and exhibited the “opportunistic” credit behavior were all found to be lower risk. These consumers either paid off trades (closed with $0 balance), made a payment amount larger than their due amount at the end of the third month or decreased their balance.

“Lenders, banks and various financial institutions across the financial services landscape extended accommodations to consumers to help them withstand the challenges brought on by the pandemic,” said Matt Komos, vice president of research and consulting at TransUnion. “The consumers who enrolled in hardship programs and exited early or continued to make payments on accounts overwhelmingly used the programs for their intended purpose.

“Not only were these consumers much less likely to go delinquent, they were able to get a leg up during a difficult situation,” Komos added in the news release.

Komos elaborated about those points and more during an episode of the Auto Remarketing Podcast.

To hear the conversation, click on the link available below, or visit the Auto Remarketing Podcast page

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