Credit scores are up despite pandemic
AUGUSTA COUNTY, Va. (WHSV) — Despite being in the middle of a pandemic, local banks are reporting their clients are doing well overall, many of them buying homes and cars.
The Fair Isaac Corporation reports the average FICO credit score has held steady at 711 since July, which was up from 708 in April and 706 a year earlier.
Mark Hanna, President and CEO of F&M Bank, said many people made smart lifestyle decisions to save money.
“A lot of people put more money into cash, they sold assets, they deleveraged, they paid off credit cards bills, many of them downsized cars,” Hanna said. “What’s happened throughout the country is just a huge influx of cash.”
And he said stimulus packages have also been a big help.
“Banks have been coming to the table with a lot of loan deferrals, some mortgages, car loans, business loans have deferred for principle and interest payments frequently anywhere from 30 days to 6 months,” Hanna added.
But Hanna said a lot of issues have been pushed back, and it will be hard to tell if people will continue getting by when stimulus and unemployment benefits stop.
“The question is, how bad is the economy going to get and when the stimulus goes away, how many folks can still continue to pay their bills?” Hanna said.
Sen. Tim Kaine said in a press conference Wednesday that a new stimulus package likely will not come until after the election.
“If nothing happens in Congress, I think most people feel we’re going to start seeing the effects late fourth quarter... and first and second quarter of next year,” Hanna said.
If people do have a more difficult time keeping up with their bills and credit scores go down, Hanna said banks may be able to work with clients to help figure out a way to get them what they may need. However, he said there will be limits to how much they can do.
“There’s also certain laws that we have to comply with that come out Washington. Certain things like fair lending that say if two people come to the bank with the same credit score, they should expect to get credit on the same terms,” Hanna said.
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