The Bureau of Consumer Financial Protection recently published its latest quarterly report on consumer credit trends, this time with a focus on the impact of natural disasters on credit reporting. The report delves into the methods financial institutions use to report assistance related to natural disasters to credit reporting agencies, and it highlights the patterns of such reporting among consumers in the Greater Houston area who were impacted by Hurricane Harvey in 2017.
Some of the primary findings from the report include:
Approximately 8% of credit tradelines had a special comment code indicating an impact by a natural disaster in 2017, with these codes typically remaining on a tradeline for an average duration of two months.
In the Greater Houston area, nearly 40% of individuals with a credit report had at least one tradeline marked with the natural disaster comment code following Hurricane Harvey.
Mortgage accounts were the most frequent type of tradeline to be flagged with the natural disaster comment code.
Tradelines marked with the natural disaster comment code were generally linked to higher median balances and a greater likelihood of delinquency before the event.
This analysis is based on data from the Bureau’s Consumer Credit Panel, which consists of a longitudinal and nationally representative sample of about five million anonymized credit records from one of the three major nationwide credit reporting agencies.
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