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Credit scores are on the rise despite the pandemic

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AUGUSTA COUNTY, Va. (WHSV) – Despite being in the midst of a pandemic, local banks are reporting that their customers are doing well overall, with many buying homes and cars.

The Fair Isaac Corporation reports that the average FICO credit score has remained stable at 711 since July, down from 708 in April and 706 a year earlier.

Mark Hanna, President and CEO of F&M Bank, said many people have made informed lifestyle decisions to save money.

“A lot of people put more money in cash, they sold assets, they got out of debt, they paid credit card bills, a lot of which are small cars,” Hanna said. “What has happened across the country is just a huge influx of money.”

And he said the stimulus packages have also been a big help.

“Banks came to the table with many deferrals of loans, some mortgages, auto loans, business loans often deferred principle and interest payments from 30 days to 6 months,” added Hanna.

But Hanna said many issues have been pushed back and it will be hard to say whether people will continue to do so when stimulus and unemployment benefits end.

“The question is, how far will the economy go and when the stimulus wears off, how many more people will be able to continue paying their bills?” Hanna said.

Senator Tim Kaine told a press conference on Wednesday that a new stimulus package would likely not come in until after the election.

“If nothing happens in Congress, I think most people think we’re going to start seeing the effects at the end of the fourth quarter… and the first and second quarters of next year,” Hanna said.

If people have a harder time keeping up with their bills and their credit scores go down, Hanna said banks may be able to work with customers to help them find a way to provide them with what they might need. However, he said there will be limits to what they can do.

“There are also certain laws that we have to obey that come from Washington. Some things like equity loans that say if two people come to the bank with the same credit rating they should expect to get credit on the same terms, ”Hanna said.

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