Hindsight is 20/20. Foresight is 2021.

Date: January 14, 2021

I wish all our readers a peace-filled, healthy, prosperous and productive Happy New Year.

Those who know me know that I am a “glass half full” kind of guy so I’m excited about what the New Year may bring. But I also am forced to temper my optimism and acknowledge that our country faces some enormous challenges. That list is unfortunately long. A serious breakdown in civility looms large and casts an ugly shadow as we witnessed a hostile mob lay siege on the United States Capitol Building and, all the more disconcerting, while Members of Congress were in session. We are deeply saddened by what we witnessed and our hearts go out to those who have family members, friends or colleagues who lost their lives or were physically or emotionally injured. Understanding and celebrating our differences in peaceful and legal ways with mutual respect is a goal that I hope all of us would strive for in the new year.

As we turn our attention to financial matters, the turn of the year marks a time of reflection and projection; a time to look forward to new beginnings, new changes, even a new you.

Take, for example, the resolution to improve a credit score. Many people make financial resolutions this time of year. According to Credit Sesame data, there actually is a 10-15% seasonal increase in consumers checking their credit scores on CreditSesame.com throughout Q1; meaning, consumers are making a concerted effort at the top of the year to monitor their financial health.

Perhaps this is the case because as they come off a busy holiday shopping season, reliance on our credit cards is ratcheted up. That’s why it’s more important, now more than ever, to take the reins on credit card usage so nothing spirals out of control (because as VantageScore studies suggest, significantly higher credit card balances and rising utilization rates contribute to downward shifts in credit ranges, i.e., Superprime, Prime, Subprime, etc).

Looking back at 2020, the good news is that even as we continued down the path of this pandemic, credit score levels reflected more conservative use of credit. In fact, Experian’s recent “State of Credit Report” from last November showed that Americans practiced responsible credit management by reducing utilization rates, credit card balances and late payments. Credit scores even experienced a climb over the past year, with a 7-point increase since the beginning of 2020.

But as we look ahead, we are beginning to see that trend dissipate. It remains to be seen whether continued economic pressure and disruption will cause lenders to be more conservative in their lending.

What we do know is that despite unprecedented challenges consumers have been resilient. And in this newsletter, we interview one of the more well-known ones! Lynette Khalfani-Cox, a personal finance advisor and small business owner, is well known to those of us in the consumer credit industry but what is less known is that she also had to stay nimble in these times. Read on to learn how her business was impacted by COVID-19 and what she did about it. Also check out our “Did you know” article, fit for 2021: Top Five New Year’s Financial Resolutions.

And for our lender readers, please see the article about how to get involved in our “Lights, Camera, Save!” program. Make sure to also have a listen to our latest podcasts featuring yours truly.

If it’s been said that “Hindsight is 20/20”; this year, I’d like to coin the phrase “Foresight is 2021.” I know it seems strange to say that I don’t want to entirely kick 2020 to the curb, but I do think it’s important to keep a keen eye on what we have been going through in order to prepare for what may come. 2020 was a difficult year for everyone, but we’ve taken scrupulous notes and it’s time to move onward and upward into 2021.

Best wishes in the new year,

Barrett Burns