TransUnion research finds many consumers benefitted from leveraging financial hardship programs. - IMAGE: TransUnion

TransUnion research finds many consumers benefitted from leveraging financial hardship programs.

CHICAGO – 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 loans and mortgages. However, a new TransUnion (NYSE: TRU) study found that the far majority of consumers continued to make payments on their accounts even when in an accommodation program.

The study found 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, more than 40% of accounts in these programs exited within the first three months of entering. 

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.

“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.”

The total percentage of accounts in “financial hardship” status showed a considerable increase from March 2020 to May 2020 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




Certain Credit Behaviors Separated Low Risk Performers from High Risk Performers

Consumers leveraged hardship programs during the pandemic due to varying financial concerns and issues they faced. 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. 

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. Those 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. 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.

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.” 

For more information about the study, please register for the Credit Behavior Shifts of Consumers in Hardship Programs Webinar. Additional resources for consumers looking to protect their credit during the COVID-19 pandemic can be found at

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