30% of Adults Taking out Loans in Past Six Months Used Them for Emergencies or to Pay Bills, ScoreSense Survey Finds

One in Four Adults Surveyed Used Loans to Pay Down Credit Card Debt

DALLAS , Nov. 4, 2022 /PRNewswire/ -- Thirty percent of consumers who took out loans during the past six months used them for emergencies or to pay bills, and one out of four people used recent loans to pay towards credit card debt, according to a consumer survey by ScoreSense®, a credit score monitoring product. The survey findings, revealed in the "Survey of Consumers with Recent Loans and Credit Outlook Analysis," focused on consumer loan and credit activity for the third quarter of 2022.

An analysis by ScoreSense of consumer credit activity demonstrates that budgets are getting tighter for consumers of all ages: Fewer people are interested in securing new loans due to higher interest rates, and those who are taking out loans are more frequently using them simply to stay on top of bills. The survey showed a continuation of credit spending, overspending, and late payments. Older adults also are experiencing the same increase in delinquencies and spending over credit limits (Card Over Limit), which shows the stress this economy can put on a fixed income. The ScoreSense loan survey revealed adults 65 or over were more likely to take a loan out for an emergency compared to younger adults surveyed.

The analysis of consumer spending and credit, which compared the third quarter of 2022 to the same time last year, revealed:

• Delinquencies increased by 21% from 2021 Q3 to 2022 Q3. Looking within the year, it increased by 14% from Q2 to Q3.
• Card Over Limit increased by 11% in Q3 from Q2 of 2022.
  New Trade, when a consumer opens a new line of credit, is down by 18% in Q3 from Q2. This figure is consistent with what we're seeing in reduced website traffic for credit and financial services. There is less consumer interest in securing new loans due to increased interest rates.

The consumer survey by ScoreSense, focused on adults who took out loans (personal, home equity, home equity line of credit, debt consolidation, and other), revealed:

• One in four adults used loans to pay towards credit card debt.
• Adults 65 or over were more likely to take a loan out for an emergency compared to younger adults surveyed.
• Almost one-quarter (23%) of survey respondents said they took out a loan for personal projects.
• One out of five (19%) respondents used the loan for home remodeling, and 18% of loans were needed for the purchase of a vehicle.
• Adults 25-34 years old (23%) were more likely to use loans for purchases of new homes and related expenses.

"Despite efforts by the Federal Reserve to curb inflation, prices remain high or continue to climb, and many Americans continue to struggle," said Carlos Medina, senior vice president at One Technologies, LLC., which offers ScoreSense. "Many adults are using credit to pay for ordinary expenses, and rising interest rates are making it more difficult for many to pay off debt. From our survey and credit analysis, these problems span all age groups, including older adults on fixed incomes."

ScoreSense serves as a one-stop digital resource where consumers can access credit scores and reports from all three main credit bureaus—TransUnion^®, Equifax^®, and Experian^®—and understand what is most affecting their credit.

One Technologies, LLC, harnesses the power of technology, analytics, and its people to create solutions that empower consumers to make more informed decisions about their financial lives. The firm's consumer credit products include ScoreSense^®, which enables members to seamlessly access, interact with, and understand their credit profiles from all three main bureaus using a single application. The ScoreSense platform is continually updated to give members deeper insights, personalized tools and one-on-one customer care support that can help them make the most sense of their credit. One Technologies is headquartered in Dallas and was established in October 2000. For more information, please visit onetechnologies.net.

Contact: Scott Tims, [email protected]

SOURCE ScoreSense