In this episode of Market Pulse, we talk to Tom Aliff, risk consulting leader at Equifax, about consumer credit trends and insights. He shares the latest in credit balances, utilization, delinquencies and explains how the stimulus has benefited consumers.

Jump ahead to these topics:

:56 - The latest in consumer insights

3:11 - Delinquencies are down

5:40 - How stimulus has helped consumers

6:45 - Small businesses

7:15 - Accommodations

8:40 - Geographic trends

11:14 - Additional insights

14:00 How lenders can grow their portfolio

This transcription is edited for brevity. Listen to the full podcast for more great insights.

Theresa: We would like to share the latest and greatest consumer credit insights on today's podcast. So, Tom, what's the latest? Are you seeing any major surprises in the consumer insights that you're looking at?

Tom: Not necessarily any major surprises yet. I think if we look back to what we forecasted a year ago, we probably would have thought of a few surprises. And of course we're seeing things continue to trend over time where balances are down across the board. The exception is the rise in mortgage balances that recently surpassed $10 trillion.

Theresa: And why is this surprising?

Tom: If we look back to last year with all the tightening that had occurred in the market and in particular, we saw consumer spend going down a lot. We've been talking about the various levels of belt tightening. I would not personally have forecasted first mortgage to be so high; however, with the interest rates being so low consumers have been accessing refinances. And one of the things that we did notice as well is that balances are down across the board. Utilization down across the board and delinquencies down across the board, which enables consumer scores to be higher.

And even though some lenders have been tightening, there's been a lot of pent-up demand. We've all been part of Zoom calls staying at home. I've heard many people say, “I can't wait for my next vacation.” Or, I have two or three ready to go. So we fully expect that there's going to be some return to normal spend levels as we look across bank card, private label and either home equity lines or even personal loans.

Theresa: What trends are you seeing with delinquency rates?

Tom: Across the board, delinquencies are down quite a bit. Even when we look at year-over-year rates, for example, bank card 60-plus delinquency rate from a dollar perspective is down about 24% compared to February of 2020. And utilization is 18% down. So, that's such a remarkable shift in delinquencies as we look at the year-over-year comparison because we all thought with unemployment on the rise, we would end up in a much more tricky situation.

Theresa: Let's talk about geographic trends. We've discussed in the past with our Vitality App that we were able to look at some geographical trends. What are you seeing across the U.S.?

Tom: This is why it's really important to dig in deeper both from the consumer side as well as the small business. It's really good to look at that because, as the example you described, there's going to be certain locations that can open up sooner outside. So restaurants will be able to be a little more open as we move into spring. In addition to that, we've overlaid the COVID rates by geography, and we're seeing there is some correlation between data points that have been either on the rise or are decreasing. And then, what type of industries operate within a given location?

For more on this interview, listen to our full podcast. To access the latest consumer credit and small business insights, contact your Equifax account executive today, or visit us online at Equifax.com/MarketPulse. 

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RESOURCES mentioned in this podcast:

• Register for upcoming Market Pulse webinars from Equifax, plus access previous webinars and presentations.
• Download our latest Credit Trends reports. 
• Equifax Peak Attributes: Differentiated attributes improve speed to market and ease of use across the entire attribute lifecycle
• Bankruptcy Navigator Index: Protect against bankruptcy losses with stronger predictive scoring