Young Americans are most anxious about COVID's impact on their credit score

Zest AI conducted a new study via The Harris Poll to find out just how much the financial fallout from the Coronavirus is affecting American consumers’ concerns about their credit scores.

Nearly one-half of respondents, 48 percent, are concerned the virus-induced recession will impact their credit score, either because of financial fallout from the stock market, a missed paycheck, or other factors. And the results revealed a key insight underneath that headline stat: younger Americans are far more anxious about damaged credit from COVID-19 than older Americans.

The Harris Poll found that 62 percent of Americans aged 18-44 think the virus will have an impact on their credit score, compared with only 27 percent of adults aged 55+.

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Perhaps the greater anxiety among younger Americans is due to a lack of solid grounding or education into what makes up a credit score.

The majority of respondents erroneously believe that income, 69 percent, and rent payment history, 81 percent, can impact a credit score. Rent is rarely figured into traditional credit scores. While income has a big effect on a consumer’s ability to borrow (most banks ask for it), it does not factor directly into traditional credit scores.

Those aged 18-44 (62 percent) are much more inclined to get this wrong than older adults aged 55+ (27 percent). Younger Americans ages 18-54 (56 percent) are also more likely to worry about a missed paycheck’s impact on their credit score going down than older Americans ages 55+ (31 percent).

While the government and consumer advocates continue to roll out programs to protect consumers, consumers should be aware they can call their lenders directly to explain their situation and request help in the short term. The Consumer Data Industry Association has issued guidance to lenders on how to report accounts in forbearance due to COVID-19 to the credit bureaus. Accounts that are current but granted forbearance will continue to be reported to the bureaus as current, but lenders may choose to also report one of two special comment codes: AW (affected by natural disaster) and CP (forbearance).