On January 25, 2023, the CFPB published a blog post analyzing the results of an analysis issued by the CFPB’s Office of Research in April of 2021 indicating that the distribution of credit scores shifted upward during the pandemic. The report shows that fewer consumers had difficulty paying a bill in the initial months of the COVID-19 pandemic than one year earlier and that both credit scores and CFPB financial well-being scores increased.
In the blog post released by the CFPB’s Office of Research, the group used credit score tiers, labeling consumer credit scores as deep subprime, subprime, near-prime, prime, or superprime. They examined the transitions of consumers across credit score tiers using a commercially available credit score by comparing the pre-pandemic score transitions (June 2010 - December 2019) to that of pandemic-era credit score transitions (March 2020 - June 2021).
Results of the analysis conclude that the deep subprime and subprime tiers experienced the biggest upward shift, though individuals in higher credit score tiers were also more likely to move up at least one tier than they were before the pandemic. Forty-three percent of consumers with subprime credit scores moved up at least one tier during the pandemic, whereas in the ten years prior to the pandemic, only 37 percent moved up at least one tier.
Read the CFPB’s blog post here.
The CFPB’s analysis on “Changes in consumer financial status during the early months of the pandemic” can be found here.