Consumer Credit Score Dynamics During the COVID-19 Pandemic and the Great Recession

This study finds that U.S. consumer credit scores improved during the COVID-19 pandemic. Those with lower credit scores saw larger gains. The gap between the highest and lowest scores narrowed during the pandemic and stayed that way. Many consumers — including lower-income people — reaped the benefits of moving up in risk category, seeing higher credit card limits and better access to mortgages and home equity lines of credit.

These trends stand in stark contrast to consumer experiences during the Great Recession. The study raises questions about how policies — such as the various consumer protection policies rolled out during the pandemic — can affect experiences during economic downturns. Further study is needed to determine whether the boost in credit scores is temporary or not and whether improved scores will have lasting impacts on the financial health and credit access of lower-income consumers.