The CFPB released a blog that discusses the latest quarterly consumer credit trends report, which explores the relationship between changes in consumers’ credit scores and the timing of consumers’ applications for credit.

The report focuses on consumers whose credit scores showed large increases or decreases between 2009 and 2017.

The bureau explained in the blog the following key findings from the report:

• Although a number of individuals have relatively stable credit scores, about two-thirds of consumers in the Consumer Credit Panel experienced large changes (over 100 points) between 2009 and 2017. Among consumers with these large credit score changes, about twice as many consumers experience their maximum score before their minimum score.
• Consumers with large changes in their credit scores in either direction tend to be younger and have considerably lower credit scores on average than consumers with more stable scores.
• Consumers are more likely to apply for a general purpose credit card (or, much less commonly, an increase in their existing credit limit) as their scores approach the maximum and minimum scores observed for the borrower over the period of analysis.
• Consumers’ application rates drop sharply as consumers reach their minimum scores, and then, after hitting bottom their application rates trend steadily upward. The decline in application rates around the minimum score cannot be explained by sudden drops in credit scores, nor can it be explained by bankruptcies.
• These patterns of application rates generally hold regardless of the levels of minimum and maximum credit scores. However, the patterns are generally more muted for those with higher levels of maximum and minimum scores.

The report also explored marketing by credit card issuers and how it may play an important role in the observed patterns. For instance, if a consumer’s credit score has been rising over time and becomes high enough for the consumer to receive pre-screened credit card offers from one or more issuers, this may lead the consumer to submit credit card applications. This in turn may generate more hard inquiries, thus reducing the consumer’s credit scores and in some cases setting a maximum score.