Credit access declined during the coronavirus crisis for credit cards but increased for mortgages and auto loans, the federal consumer financial protection agency said in its final report issued Thursday in a series documenting consumer credit trends during the pandemic.
The report, according to the Consumer Financial Protection Bureau (CFPB), focuses on access to new credit, that is: the share of new credit applications that result in new accounts and the amount of credit that is extended to consumers who open new accounts.
The report asserts that the volume of inquiries about credit card applications (that is, inquiries on consumer credit reports) fell substantially early in the pandemic, not recovering until March 2021. On the other hand, inquiries about auto loans – while falling in the early months of the pandemic – rose above pre-pandemic levels as early as summer 2020.
“It is possible that the consumers who were applying for credit cards … during the pandemic were not the same types of consumers as were applying for credit before the pandemic, and this may partly explain the change in success rates,” the report states.
For mortgages and auto loans, the report notes, the agency did not see any corresponding drop in success rates for credit extensions following the impact of the pandemic. “For auto loans there was a small and transitory dip in March and April 2020, but by February 2021, the success rates for auto loan and mortgage inquiries were well above pre-pandemic levels,” the report states. “This result for auto loan and mortgages inquiries contrasts somewhat with responses to the Federal Reserve’s survey of bank loan officers, which indicate that large banks tightened lending standards on auto and mortgage loans during 2020, only loosening standards in 2021.”