CHICAGO, Aug. 25, 2021 (GLOBE NEWSWIRE) -- The percentage of consumers who reported their household income is negatively impacted by COVID-19 continued to decline, reaching 30% at the beginning of August. TransUnion’s (NYSE: TRU) newest Consumer Pulse study found that despite the improvement in income, unknowns about new COVID-19 variants are causing some shifts in consumer spending. In particular, the Millennial generation is facing the greatest challenges.
The latest Consumer Pulse study includes a survey of 3,085 U.S. consumers conducted August 3-9, 2021.
The percentage of consumers who say their income is currently negatively impacted by the pandemic has dropped to 30% from 38% in Q1 2021 and 32% in Q2 2021. However, possibly due to rising COVID-19 cases, households who expect or are unsure if their income will decrease due to the pandemic in the future rose to 56% from 50% in Q2.
“It’s a positive sign to see continued improvement in household incomes, though it’s evident that the robust recovery observed the last few quarters has slowed in the late summer. This is likely due to the recent increases in COVID-19 cases as new variants impact parts of the country,” said Charlie Wise, head of global research and consulting at TransUnion. “We have observed increased household incomes and credit market expansion throughout 2021 – both of which are positive signs for the economy. Hence, it will be important to monitor in the near-term if increased COVID-19 cases are a short-term blip or if they continue to grow for a longer period of time.”
Interest in Building Emergency Funds and Seeking Credit Online Growing
The recent increase in COVID-19 cases also has affected consumer spending behaviors, with more people shifting to online. Among the 30% who say they will increase their online purchases in the next three months, 78% claim it’s because of the recent spike in COVID-19 cases.
Americans are also working to ensure they have access to cash and credit. A greater share of consumers, 21% over Q2, report saving more in an emergency fund. Out of all generations, Millennials and Gen Z are the top two groups that believe it’s important to have access to credit to achieve their financial goals with around half of them planning to apply for credit or refinance a loan within the next year (Millennials at 54%; Gen Z at 43%).
About one-third of consumers self-reporting to be in the near prime risk category (credit scores between 601-660) and 27% of those self-reporting as subprime consumers (300-600 credit score range) also plan to apply for new credit or refinance credit within the next year. Among all credit score ranges, those reporting to be prime plus (721-780) said they were most likely to apply for new credit or refinance existing credit within the next year at 44%.
“The good news is that six in 10 survey respondents said they are checking their credit at least monthly. This finding aligns with 65% of Americans saying it’s very or extremely important to monitor their credit,” said Margaret Poe, head of consumer credit education at TransUnion. “It’s extremely helpful for an individual to understand where they stand from a credit health perspective and how they can potentially improve their situation.”
Millennials Continue to Face the Greatest Challenges
In 17 of the 18 TransUnion Consumer Pulse studies since March 2020, Millennials reported the largest negative household income impact. In early August, nearly half (46%) said their household income was currently decreased due to the pandemic. Millennials were the only generation to see this percentage rise from Q2 2021.
Millennials struggle to pay bills with 42% reporting they’ve missed a loan or bill payment in the past three months, the highest percentage among any generation. Looking for help, 25% say they rely “a great deal” on government financial support to get through the pandemic–nearly twice Gen Z (13%), more than twice Gen X (10%) and more than four times Baby Boomers (6%).
“It can be disheartening to see your credit score drop after a financial setback. But with a plan, healthy financial habits and a dose of patience, you can rebuild your credit. By improving your overall financial picture, your credit will follow over time,” concluded Poe.
TransUnion’s COVID-19 support center provides helpful information for consumers who are concerned about their ability to pay bills and loans. Individuals interested in learning how to read their credit report can click here. The complete Consumer Pulse study can be viewed here.
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.
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| Contact | Dave Blumberg |
| TransUnion | |
| david.blumberg@transunion.com | |
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