New Study Reveals Different Personas of ‘Financial Invisibles’ in America

Comprehensive survey identifying the makeup of Financial Invisibles and what invisibility means to their access of financial tools

BOSTON--()--Financial Invisibles are those who are either neglected by or left out of the traditional financial system. Their lack of participation often stems from either choice, barred access or a combination of the two. The PYMNTS Financial Invisibles Report, a Unifund collaboration, analyzes the responses of more than 2,000 Americans — particularly low-income individuals — about their financial habits and circumstances.

The survey identifies four Financial Invisible personas:

  • No Worries: People who have no delinquencies and can fully participate in the financial system
  • Second Chances: Those who have had delinquencies in the past but can still participate in the financial system
  • On the Edge: People who struggle to make ends meet and have no delinquencies but are not able to participate in the financial system
  • Shut Outs: Those who have had delinquencies in the past and, as a result, are unable to participate in the financial system

Among the four persona categories, credit scores ranged from Shut Outs averaging 525, to No Worries averaging 714, and the rest in between.

Just 4 percent of Shut Outs and 30 percent of On the Edge have credit cards, compared to 65 percent of individuals who fall in the No Worries category. This low penetration isn’t entirely due to a lack of desire for obtaining credit cards, but is also reflective of a lack of access to credit, coupled with a poor credit rating. For instance, roughly 98 percent of Shut Outs without credit cards are unable to get one.

Other key takeaways from the October edition of the PYMNTS Financial Invisibles Report, a Unifund collaboration, include:

  • Financial Invisibles largely live paycheck-to-paycheck; 85 percent of Shut Outs, 73 percent of Second Chances and 66 percent in the On The Edge group report doing so.
  • 75 percent of Shut Outs have been contacted by a bill collector within the past year.
  • 24 percent of respondents are “Voluntary Invisibles,” individuals who have made a decision not to participate in the financial system. Meanwhile, 5 percent are “Involuntary Invisibles,” who have been locked out of the financial system due to delinquencies or other circumstances.

To access the complete Financial Invisibles Report, please click here.

About PYMNTS:
PYMNTS is where the best minds and the best content meet on the web to learn about “What’s Next” in payments and commerce. Our interactive platform has reinvented the way that companies in payments, commerce and retail share relevant information about initiatives that make news and shape the future. Our data and analytics team includes economists, data scientists and industry analysts who work with companies to measure and quantify the cutting-edge innovation of this new and dynamic commerce ecosystem.

About Unifund:
Unifund is a technology solutions provider with 30-plus years’ experience working with lenders to grow revenue, enhance charged-off portfolio management and provide a valuable solution for their most at-risk customers. Our proprietary data and predictive analytics help lenders successfully manage charged-off consumer portfolios and enhance overall recoveries in a non-confrontational, compliant manner.

Contacts

PYMNTS
Alexander Terzian, +1 774-219-6132
aterzian@pymnts.com

Contacts

PYMNTS
Alexander Terzian, +1 774-219-6132
aterzian@pymnts.com