A few weeks ago, anyone with a credit score above 600 could get approved for a personal loan or credit card, at a fairly reasonable interest rate, in a timely fashion.
They would likely have a different experience today.
Credit scores help financial institutions determine the risk associated with loaning money to a particular person. By using credit scores, financial institutions instantly know the trustworthiness of the borrower, and the corresponding interest rate to charge them.
The coronavirus pandemic has made credit scores much less reliable in determining the trustworthiness of borrowers and their associated risk. Virtually overnight, financial institutions must completely reassess the perceived risk of lending to consumers. It’s uncharted territory.
As a result, financial institutions are taking extreme precautions when lending and
So, what does this mean for American workers?
Financial institutions will require more documentation to approve loans, and credit score requirements will inch higher. Expect higher interest rates and lower amounts approved. Recently,
Americans are in a tough spot. They'll likely have
Your employees need your help to access affordable credit now.
Not everyone has paused lending, and there are a few ways you can help your employees get access to affordable funds in this difficult lending market.
One quick option is to pursue a partnership with a financial wellness provider that can offer your employees favorable lending terms. At
Another option is to consider
As employers, it's necessary to be proactive in considering the needs of your workforce. That includes shifting to focus on being more