1 in 5 Credit-Challenged Young Adults Who Lost Financial Ground in Pandemic Doubts They’ll Ever Fully Recover
Survey of credit-challenged Americans from OppLoans finds that a majority of respondents expect it to take at least 4 months to bounce back
Chicago, July 6, 2020—According to a new survey from OppLoans, a vast majority – 72% – of credit-challenged Americans say they have experienced at least some form of financial setback due to the economic contraction caused by the COVID-19 pandemic. Moreover, of those respondents, 60% believe it will take at least 4 months to recover – and 12% don’t believe they’ll be able to ever regain their footing.
But COVID-19 seems to have hit young adults the hardest. Among those respondents ages 18 to 34 who reported losing financial ground, 20% don’t believe they’ll be able to regain it. In addition, this demographic is more likely to report losing their income as a result of COVID-19: One-third (34%) say they lost their wages, compared to 30% of those ages 35 to 54 and 13% of adults over the age of 55. Young adults are also the most likely cohort to worry about losing their home as a result of COVID-19, at 19%, compared to 14% of adults ages 35 to 54 and 12% of adults 55 or older.
“Millions of middle-income, credit-challenged Americans were already in a precarious financial position before the pandemic – living without any savings – but the effects of the past few months have created long-term hardship for many striving for financial stability,” said Jared Kaplan, CEO of OppLoans. “COVID-19 has quickly magnified the impact financial shocks can have on middle-income consumers when they don’t have access to financial products that meet their needs, and further amplifies the need for more sustainable solutions that build financial resilience and expand credit access.”
Additional findings from the survey include:
- Nearly half (47%) of credit-challenged Americans experienced a budget-breaking event in the past 18 months.
- Eighteen percent of respondents say they have overdrafted their bank account due to the pandemic, and 15% are unable to pay off their credit card bills.
- Fifteen percent are worried about losing their home, and another 15% now say they won’t be able to buy a home, also as a result of COVID-19.
- Twenty-nine percent anticipate needing forbearance from their lender and/or credit card provider in the next three months.
- Men are more likely than women to have experienced a financial emergency over the past 18 months (52%, versus 44% of women), and are also more likely to report they lost financial ground (77%, compared to 68% of women). However, when the bills come due each month, women report feeling higher rates of stress (40%) and worry (29%) than men (24% and 22%, respectively).
These findings are from an OppLoans survey assessing 500 U.S. adults ages 18 or older and making an annual income of less than $50,000, with a self-reported FICO score of less than 620. The survey was fielded in June 2020.
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OppLoans is a leading financial technology platform that provides accessible products and a top-rated experience to middle income, credit-challenged consumers. Through our unwavering commitment to customer service, we help consumers, who are turned away by traditional providers, build a better financial path. OppLoans has been ranked as an Inc. 500 company for four straight years, listed on the Deloitte’s Technology Fast 500™, and named the fourth fastest-growing Chicagoland company by Crain's Chicago Business. OppLoans maintains an A+ rating from the BBB. For more information, please visit OppLoans.com.
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