In order for a collector to have a debt to collect, a consumer has to obtain some form of credit. That could be as simple as the balance from a visit to the doctor’s office or as complicated as a mortgage or auto loan. The COVID-19 pandemic sent many consumers to the credit reports, analyzing them and identifying old debts that needed to be repaid in order for the consumers’ credit scores to improve. And now it seems as though more consumers are taking advantage of the end of the pandemic and higher credit scores by going out and applying for credit in numbers that were seen before COVID hit the United States in March 2020, according to data published yesterday by the Consumer Financial Protection Bureau.
The report issued by the CFPB looked at applications for mortgages, auto loans, and credit cards, comparing the number of applications that were made before the pandemic and how many are being made now. Auto loan inquiries, for example, fell by 52% when the pandemic struck, but had returned to pre-pandemic levels by this January. It took credit card applications two months longer to recover to pre-pandemic levels, according to the CFPB.
“While consumer credit applications have generally recovered to pre-pandemic levels in the aggregate, we see important differences across consumers,” said Acting CFPB Director David Uejio, in a statement. “Both borrowers with superprime and subprime credit scores are still not applying for credit as much as they were pre-pandemic. We will continue to keep a close watch on the marketplace as the economic recovery continues, to help ensure all consumers have access to financial products and services that are fair, transparent, and competitive.”
Given that application volume has remained steady throughout 2021, it does not appear that the increase in applications is a result of stimulus payments from the federal government, the CFPB concluded.
