Advise to navigate these times from a credit analyst

[Anonymous]

Nice read. Thanks!

[Anonymous]

Sorry everyone! Was just typing as I was thinking without any format to it! Downfall of typing on my phone. I know it is hard to ready appreciate the responses. 

[Citylights18]

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@Anonymous wrote:

My recommendation is to sit tight and wait, hold off on credit and just garden your existing relationships for a few more months. Stick to your trends if possible. While it definitely is unfortunate that in your time of need they are cutting into emergency funds and impacting your ability to access money you need to feed your family and cover bills, banks are in the business of making money and they are using their data and extensive trend reports to mitigate potential loss in these times. The likelihood of adverse action greatly decreases if you stick to your normal patterns and don't deviate from this too much. I am sorry for anyone impacted by the virus or facing economic hardship. My other recommendation is if you need to run balances do so on cards you don't mind losing and keep your preferred lenders on trend! I am personally headed to the garden for 6 months at minimum to stay low in these times.

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This was my initiution on how to navigate through this time. 

Certain things in my life that I was planning to do this year like buy a house I realize are going to have to move to the right. I'm in one of those pricey markets where prices are a house of cards. It going to be a U shaped recovery and the stimulus money is tightening up because of concerns over the deficit. The next 30 days may not be too different but where does that leave people in 6 months time?

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[Anonymous]

My company (f500 lender) is forecasting large defaults in small businesses in the industry we lend for a year. We haven't seen a sharp decline yet since we serve a necessary industry but if it is true that this goes on for a year a lot of small businesses may struggle to access lending and might not be able to float bills.... etc at least the oil industry is rebounding which helps those impacted businesses but in terms of the job market returning it really depends on your area that you are living. In 6 months I think we may still be having issues due to flare ups of the virus from ending stay at home too early. 

I have read reports and forecasts that this will be an ongoing issue. You also have to think about how long it may take a bank or companies to rebound from this since as a timeline for economic stability, just because jobs return does not necessarily mean lending will resume as usual especially as defaults start to be realized by banks. There's also the discussion of future policy and taxes to cover this enormous bill that was passed. SBA loans are drying up and once the ones that have been applied for are done funding it could worsen if no new funding is made available. That is why I kind of got the 6 month mark. If the economy normalizes next month it may take 5 or 6 months for banks to loosen up again if not more. 

[Anonymous]

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@Brian_Earl_Spilner wrote:

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@KLEXH25 wrote:

Thanks for your input and advice @Anonymous! It's interesting (& crazy) that they could be taking actions against people based on their job industry. At the end of the day, they're just trying to cover their butts. I admit that coming here makes the temptation of applying hard to resist, but posts like this (and others mentioning AA) is a great reminder of my credit and gardening goals. There is honestly nothing I need that my current cards don't offer, and I have to keep remembering that!

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They've been tracking that info and making decisions based on it for a long time. It's the reason applications will ask for your position at your employer. It's also why it's easier to get a loan for someone who stays in the same industry or position after changing employers. 

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Agreed. Although I've only been with the Texas AG's Office 3 years, I've been employed as an attorney (prosecutor) without a gap in employment for 21 years. Additionally, government employment is often more stable than private sector. Although I've had to telecommute since 3/17, there's been no risk of job loss or pay reduction. Possibly also why I sailed through underwriting for the new home I closed on 4/14. 

[FieryDance]

Thank you so much for the knowledge, @Anonymous !

Could you elaborate a little more by industries?  For example I would imagine travel and traditional retail will be more impacted and healthcare, pharma even biotech will be less impacted, but how about finance, IT etc?  

[M_Smart007]

@Anonymous, Congratulations on your new home

[Anonymous]

@M_Smart007 @Thanks!

[bettercreditguy1]

You have made some very good points. I read today that Capitol One has 1% of their credit cards in defered payment arrangements. In their portfolio this means around 1.2 Million of their (Cap One) cards of 120 Million issued and active cards are behind. Quite a staggering number when it was presented this way. I believe if any of you can pay off or pay down your rolling unpaid monthly balances, now is the time. As stated earlier, any little hicup with your realtionship to your lender could change  your financial picture overnight. As always your mileage may vary, be safe and may you all have good financial intuitions during our  present economic challenges.