Americans Emerge From 2020 With Renewed Focus on Personal Finances
New Experian survey highlights improving consumer sentiment about personal finances against the backdrop of a challenging year
COSTA MESA, Calif.–(BUSINESS WIRE)–As the nation reflects on the one-year mark of the pandemic, Experian explored current consumer sentiment and the financial impact of COVID-19 compared to the start of the pandemic in a recent national consumer survey. Findings reveal many Americans feel more optimistic about their finances and demonstrated prowess in managing their money and credit scores during the pandemic, which attributed to the average credit score increasing in 2020.
Pandemic pressures created healthy habits
According to Experian research, the average FICO® Score hit a record high of 710 last year, a seven point increase from 2019. Several factors may have contributed to this improvement; the recent survey revealed almost a quarter of respondents checked their score more often than before the start of the pandemic, while many consumers surveyed (29%) took steps to prepare for a recession such as cutting back on spending, which remained consistent with those surveyed one year ago (at 32%). Respondents also paid off debt, with fewer carrying credit card balances (a decrease of 13%) and student loan debt (a drop of 6%) compared to last year.
Consumers feel more financially stable today
Survey respondents indicated they feel less worried about personal finances today, with 55 percent feeling concerned vs. 69 percent in 2020. Concerns about credit decreased by 10 percent from one year ago, with 37 percent currently worried. Also, anxiety about the economy fell from 66 percent to 58 percent. Moreover, consumers plan to increase spending in areas such as travel (by 14%) and entertainment (by 8%).
As society continues on the road to recovery, Experian is committed to assisting consumers get access to credit and promoting financial inclusion with many free resources available to help, including Experian Boost™, a free tool that allows consumers to add positive payment history for utility, telecom and video streaming services to their Experian credit file to potentially increase their credit scores. Americans have collectively increased their credit scores using Experian Boost by more than 50 million points to date and on average gain a 13-point score lift.
“This past year has certainly been tough for everyone, and I’ve been amazed at the strength and perseverance of Americans to get through this global pandemic,” said Hill Harper, Experian Boost ambassador and financial literacy activist. “As we hopefully turn a corner now, we can take time to reflect on how our finances were impacted and plan ahead. It’s never too early to start saving and creating a ‘rainy day’ fund for future crises, utilizing free financial tools available like Experian Boost, and setting financial goals so we can have something positive to look forward to such as buying a new home or attending college.”
Consumers continue to be financially diligent
Half of consumers surveyed will use the recent stimulus payment to pay down current monthly bills, while 44 percent will put the money into savings. Nearly 2 out of 3 survey respondents say they will find new ways to save money in the coming months, and 36 percent will work to improve or maintain their credit score.
Harper adds, “Coming out of this pandemic and looking ahead to the rest of the year, my recommendation is to first, re-stock your emergency savings account with at least six months of funds to cover necessities (food, shelter, etc.), and then pay down your highest interest debt.”
For more tips from Harper during Financial Literacy Month, follow him on Twitter and Instagram throughout April at @hillharper.
Visit https://www.experian.com/blogs/ask-experian/consumers-feel-better-pandemic-economy/ to view the survey findings.
About Experian
Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime.
We have 17,800 people operating across 45 countries and every day we’re investing in new technologies, talented people and innovation to help all our clients maximise every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.
Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group.
Contacts
Sandra Bernardo
Experian Public Relations
949-567-3676
[email protected]
