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The early effects of the COVID-19 pandemic on credit applications

This report documents the early effects of the COVID-19 pandemic on credit applications, which are among the very first credit market measures to change in credit report data in response to changes in economic activity. Using the Bureau’s Consumer Credit Panel, we study how applications for auto loans, mortgages, credit cards, and other loans changed week-by-week during the month of March, compared to the same time in previous years.

We find that by the end of March, applications for most categories fell between 30 and 50 percent, with relatively larger decreases among consumers with higher credit scores. We also find that the South and Midwest experienced relatively smaller drops, while the Northeast and California experienced relatively larger drops. These state-level drops are correlated with the number of COVID-19 cases per 100,000 residents and the share of workers entering unemployment in the state.

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