Both consumers and lenders have experienced a number of unforeseen ramifications of the financial downturn in recent years, including rises in credit card debt, foreclosures and personal bankruptcies.
However, a new report suggests one of the biggest results of this recent crisis has been a strain of consumer and lender relations – particularly among those with previously good credit.
The number of first-time defaulters – defined as individuals who until recently had gone their entire lives without a prior negative credit-related incident – now encompasses 11 percent of all consumers with bank accounts, according to Deloitte’s Consumer Lending Survey. Many of these consumers rated their interactions with their lenders as poor, and said it may strongly encourage them to look elsewhere for borrowing.
Of those who experienced traumatic events with lenders, the most – 58 percent – reported to being contacted by a collection agency. In turn, 43 percent reported being delinquent on medical bills, the agency’s report said.
In addition, the report suggested lenders could benefit by more effectively differentiating the temporary credit-impaired and those who have long-term credit problems.