It’s a little harder for U.S. consumers to get credit as lenders pull out during the coronavirus crisis, The Wall Street Journal reported.

The main reason is that banks can no longer easily determine who is creditworthy.

“Banks are looking very carefully at their underwriting models to see if they need to be adjusted to take into account latent risk,” Robert Strand, senior economist at the American Bankers Association, told the WSJ.

As the unemployment rate hit nearly 15% last week and more than 40 million Americans are collecting unemployment benefits, some are likely to be behind in their payments.

But missed payments are not reflected in their credit scores and are not consistently recorded on borrowers’ credit reports, the newspaper reported.

A provision in the CARES Act states that if a lender forborne on a mortgage, car loan, or other payment, they cannot report them late to credit reporting companies.

Data TransUnion, one of the country’s largest credit bureaus, revealed that from March 1 through May, there were more than 100 million accounts on a deferred debt payment program, the newspaper reported.

As a result, the Federal Reserve said last week that the country’s largest U.S. banks could be grappling with as much as $ 700 billion in loan losses.

“Without specific information, their only option is to withdraw from the loan,” Michael Abbott, North America banking manager for consulting firm Accenture PLC, told the newspaper. “Banks don’t know who will pay and who won’t. It’s like flying blind in a credit storm. “

In early April, 33% of banks told the Fed they had increased their minimum credit score requirements for credit cards in the previous three months, up from 14% in January.

Equifax inc., another major credit bureau, said the number of loans had declined. About 79,000 personal loans were issued for the week ending May 10, down from 226,000 for the week ending March 22, a 65% drop as customers and lenders pulled out.

As car sales have plummeted, auto loans and leases, to 266,000 compared to 390,000, or nearly a third less over the same period. Credit card issuance totaled 483,000, compared to 856,000.

Fair Isaac Corp., the provider of FICO scores, said the company plans to launch an index that will appear alongside the scores of loan seekers to predict the likelihood that applicants will resist financial hardship during the recession.

“He gives [lenders] that extra filter on how a person is going to handle an economic downturn, ”FICO CEO William Lansing told the newspaper. “The increase in approvals will be more than the increase in rejections.”

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NEW PYMNTS DATA: MAKING LOYALTY WORK FOR SMALL BUSINESSES – UNITED KINGDOM EDITION

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