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Maintaining credit health during this pandemic is key

When borrowers honor their obligations, there’s no reason to see credit in a bad light, especially as it helps the economy grow faster this way. But how do you manage credit in the middle of a pandemic?

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Keeping your physical and mental health in check during the COVID-19 pandemic is crucial, but global information and insights provider TransUnion emphasizes that financial health must not be set aside. For most people, this generally entails having a steady flow of income, looking after any savings, and maintaining bill payments and other financial commitments.

But with the severe economic impact of COVID-19 globally, this isn’t always possible and it is vital that consumers truly understand how certain aspects of finance work to find or even create opportunities amid these difficult times.

There is no standard measure of financial health as each person’s circumstances are unique, but there is one aspect to finance that is often misunderstood, and that is credit. Credit is an important part of the economy because it allows entities and consumers to engage in transactions now that may not be possible if they only rely on their current capacity.

Anyone who has a credit card, loan, bank overdraft, or other similar credit agreements has a credit report – a record of how they manage their credit obligations, collected and aggregated by credit agencies like TransUnion. When borrowers honor their obligations, there’s no reason to see credit in a bad light, especially as it helps the economy grow faster this way. But how do you manage credit in the middle of a pandemic?

“A healthy credit history can help determine a consumer’s ability to access financial products and their ability to get competitive deals. At TransUnion, we are working with financial institutions to help them better understand consumers so they can continue to provide them with the financial services they need. TransUnion’s data quality assurance team stringently reviews credit data contributions and ensures that consumers are being accurately represented so their access to financial services remain unhampered during the challenges presented by COVID-19,” said Pia Arellano, TransUnion Philippines president and CEO.

Regulatory and institutional safeguards notwithstanding, there are a number of habits that consumers can practice to maintain good credit health even amid a pandemic.

1. Pay bills on time

Make it a point to not miss any payment deadlines, even if you can only pay the minimum amount. Automate it if possible or set alarms if you must. The purpose of a credit report is to help lenders see whether or not you miss payments and predict a behavior pattern for the future.

There are grace periods accorded to consumers during the pandemic, so it’s best to be aware of the policies implemented by your bank or financial institution for your convenience. Depending on your case, you may need to contact them directly to arrive at a repayment plan that suits your needs at present. However, if you can pay as soon as the bills come in, do so and you’ll have less to worry about.

2.  Set a budget and stick to it

The economic impact of COVID-19 is likely to extend over many years and having the discipline to stick to a budget and not over spend now will benefit you in the long run. In addition, do not apply for several new accounts at a time. Having a lot of simultaneous inquiries on your credit report worries lenders as it is a sign that you might be using credit and loans to supplement your income because you are spending beyond what you can actually afford.

3. Maintain low balances

Credit cards are considered “maxed-out” when you have spent 90% or more of the credit limit. When you maintain lower balances, lenders view you as someone who uses their credit responsibly. To achieve this, you should be able to pay your bills in full, on time, every time.

4. Build a strong relationship with lenders by being a responsible borrower

Lenders recognize that with higher credit limits comes increased responsibility. Credit limits tend to be reflective of both your wider financial standing as well as historic account conduct. A high credit limit reflected in your credit report can signal to lenders that you are a trustworthy candidate for new lines of credit. Should an unprecedented event such as this pandemic arise, you know that you’re in a position to access financial products at competitive interest rates if you need to.

5.  Beware of phishing and other scams that proliferate even during crises

A recent TransUnion report found that fraudsters are decreasing their schemes against businesses but increasing COVID-19 focused scams against consumers online. With the rise in digital transactions in banking, make sure you do not fall victim to fraud activities like account takeover or unauthorized account opening schemes that can taint your credit report. As a general rule, steer clear of offers that sound too good to be true. Legitimate financial institutions can never provide miraculous results in the short-term.

Other precautions include doing a regular review of your bank accounts for any suspicious activity, never providing sensitive information such as PINs and One-Time Passwords, and keeping your information secure against phishing attacks. It’s worth looking into password managers and updating your passwords on your bank accounts every so often. If you need to communicate with your bank, stick to its official channels.

6. Contribute to a savings fund

Building an emergency fund is generally considered good practice in your overall budgeting and serves to keep your credit health in check as well. Having enough funds on hand will help cover credit obligations, keeping you in good credit standing until you recover and things stabilize again.

Navigating the road to economic recovery

Build and keep the above-mentioned habits and you’ll maintain a good credit standing and overall financial health. Now, what should you do if you still cannot pay your bills at this time due to sudden loss of income or other extreme circumstances?

Consumers should coordinate with their bank or financial institution to explain their situation. Generally, consumers can request a payment holiday, lowering of monthly payments until they have fully recovered, or restructuring of a loan or credit facility for a smaller payment amount and longer tenure. Needless to say, it helps if you are in good credit standing to begin with.

As a seasoned and trusted global data steward, TransUnion recognizes its unique position to help consumers as they pursue economic recovery by helping financial institutions address current uncertainties using the power of information. Building on its database of 25 million account points that features a more holistic and insightful view into consumer behavior, TransUnion has started harnessing trended data that looks at richer information from a longer period of time (24 months payment history) to determine a consumer’s current and likely future financial situation. This, in turn, gives businesses quality information to continue supporting customers even in uncertain times such as the pandemic. When done right, everyone contributes to helping the economy bounce back stronger.

“We’ve been called to do bayanihan to recover as one, which essentially recognizes the need for us to work together to fully address current financial challenges. Our mission at TransUnion is to use the data that we have to help businesses and consumers make smarter finance decisions, especially during difficult times like this pandemic. We hope to continue creating a virtuous cycle of empowered businesses that empower consumers to gain access to financial services which can uplift their lives and financial health, as we believe this contributes a great deal to their physical and mental well-being too,” said Arellano.

BizNews

In-aisle store displays might crowd shoppers and reduce overall sales

Retailers might seek strategies to boost product exposure without also increasing crowding – especially for cart shoppers who may experience greater crowding effects – and that excessive use of in-aisle fixtures will likely dampen sales at the aggregate level rather than increasing it. 

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In a study involving a real-world grocery store, in-aisle displays meant to boost product visibility were in fact associated with reduced sales and purchase-related behaviors, with results amplified for shopping cart users.

Mathias Streicher of Austria’s Department of Management and Marketing presents these findings in the open-access journal PLOS One.

Retailers often place extra product displays directly in aisles in an effort to boost visibility and enhance sales. However, in-aisle displays could increase spatial crowding, which occurs when people feel restricted in their freedom of movement and has been linked with purchase-avoidance tendencies. To help clarify if in-aisle displays result in more purchases, Streicher conducted several experiments with a partnering grocery store.

First, they tracked weekly sales for an aisle containing household, baby and pet staples over a six-week period during which five product-display stands were placed mid-aisle. The stands were then removed for six weeks. Comparison of sales data showed that in fact, sales increased after removal of the in-aisle displays, with the average weekly percentage of total store revenue from that aisle rising from 4.33 to 4.83 percent.

A second in-store experiment in the same aisle showed that people using shopping carts also stopped and physically handled products—behavior previously linked with sales—about 7.05 times more often when in-aisle displays were absent than when they were present. Non-cart shoppers also touched products more often when displays were removed, but the effect was smaller (3.81 times).

Finally, in an online experiment, 200 participants imagined using a shopping cart or basket while viewing photographs of the same aisle from the in-store experiments, with or without in-aisle displays. They tended to rate the aisle with displays as more crowded and reported lower levels of perceived control for aisles with displays than those without, with effects amplified for imagined cart versus basket use.

Together, these findings suggest retailers might seek strategies to boost product exposure without also increasing crowding – especially for cart shoppers who may experience greater crowding effects – and that excessive use of in-aisle fixtures will likely dampen sales at the aggregate level rather than increasing it. 

Further research could address some of this study’s limitations, such as by considering the effects of human crowding, promotional offers on products, and seasonal influences on shopping behaviors.

Streicher adds: “The research shows that adding merchandise into store aisles can actually reduce overall sales by making the environment feel crowded and harder to navigate. Importantly, this negative effect is even stronger for shoppers using carts, as they experience greater spatial constraints and reduced control while shopping.”

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BizNews

Structure of online reviews shapes their helpfulness

Reviews that grow increasingly positive are most helpful to readers, while those that turn negative are least helpful. For average-rated products, progressively negative trajectories enhance helpfulness, whereas reviews that start negative and grow positive are least effective.

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A study of nearly 200,000 Amazon reviews shows that the usefulness of online product reviews depends not only on what is said, but on how the information is structured.

The researchers, from the Universities of Cambridge and Queensland, studied Amazon reviews for products ranging from clothing to food to electronics. They found that how the information is organised matters as much as what is said, and that different review structures are more or less helpful, depending on how highly the reviewer has rated the product.

Their results, published in the journal Scientific Reports, could help companies and third-party review platforms design their review pages to prompt the sort of reviews that will be most helpful to potential customers.

For example, a reviewer assessing a laptop might praise its performance and design while criticising its battery life, so how should such information be structured to be most useful to the reader? Should the review begin with criticism and end on a positive note, or start positively before turning to drawbacks?

“Any target of evaluation typically has both positive and negative aspects, which makes crafting evaluative messages challenging,” said co-author Dr Yeun Joon Kim from Cambridge Judge Business School. “The key question is how to structure these elements within a single message. For example, one might present criticism upfront and then move to praise, or instead integrate negative points within an otherwise positive evaluation. Yet research has paid little attention to this structural dimension.

“We wanted to understand whether certain structures are consistently more effective, or whether their effectiveness depends on the performance of the target being evaluated.”

The study was based on 195,675 reviews of 5,487 distinct products, and assessed performance and related factors, and a helpfulness score as measured by reader votes.

The researchers identified nine possible structures of online reviews ranging from Type A reviews that start positive and become more positive as they go along, to Type I reviews that start negatively and become even more negative – with lots of variance in between.

For highly-rated products, reviews that grow increasingly positive are most helpful to readers, while those that turn negative are least helpful. For average-rated products, progressively negative trajectories enhance helpfulness, whereas reviews that start negative and grow positive are least effective. For low-rated products, reviews are judged most helpful when they open constructively before introducing criticism.

“The results are nuanced but very clear,” said co-author Dr Luna Luan from the University of Queensland, who carried out the research while earning her PhD at Cambridge Judge Business School. “Looking at the overall sentiment of reviews does not fully translate into message effectiveness. It is the broader structure of sentiment – how positivity and negativity evolve throughout the review – that shapes how readers interpret online reviews.”

“Our findings have practical implications for how platforms and companies can design review pages in order to elicit the sort of reviews that will be most helpful to readers based on how highly products are rated,” said Kim. “For example, instead of simply asking ‘Write your review here’, the online review form could instead include micro-prompts that guide how reviewers structure feedback in a way recipients find most helpful.”

The researchers found the most commonly used review styles are not necessarily the most helpful to readers. In particular, for average- and low-rated products, the structures that reviewers tend to adopt often differ from those that readers find most useful.

This mismatch likely reflects different underlying motivations. Reviewers are not always writing to maximise usefulness for others, but may instead be expressing their own experiences, frustrations or emotions – especially when evaluating products of moderate or poor quality. As a result, review writing often serves both as information sharing and as a form of self-expression. This helps explain why widely used review styles do not always align with what readers perceive as most informative or helpful.

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Strategies

Online marketers, take note: Online viewers prefer livestreams to recordings

Watching an online performance in real time boosts several aspects of the viewing experience.

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In an era when most TikTok videos are prerecorded, can a band with a new single create a tighter bond with fans by debuting via livestream instead? Can a business do the same when promoting a new product?

New research from the McCombs School of Business at The University of Texas at Austin suggests they could.

Since the pandemic, the livestreaming industry has been booming. The global market is expected to reach $345 billion by 2030, up from $100 billion in 2024. Nearly 30% of internet users watch livestreams at least once a week on social media.

Adrian Ward, associate professor of marketing, is one of them. A few years ago, he was viewing a livestream of a town hall meeting and found himself gripped by a speaker’s comments, feeling as if he were actually in the room. On reflection, he suspected it was the liveness of the event, as much as the speaker, that kept him glued to the screen.

“As we spend more of our time online and on social media, it’s worth asking how we can feel as complete and connected as possible in these spaces,” Ward says.

Live and Let Stream

With Alixandra Barasch of the University of Colorado Boulder and Nofar Duani of the University of Southern California, Ward began to investigate what he calls the “mere liveness effect”: the idea that simply knowing an event is streaming in real time makes a viewer feel more connected to the performer.

The researchers ran five experiments with 3,500 total participants. By manipulating various factors, they compared how, when, and why viewers reacted to watching livestreams versus prerecorded videos online.

In one experiment, participants watched live or recorded videos of their choosing on the platform Twitch. In another, they viewed a performance by the R&B cover band Sunny and the Black Pack, either live on YouTube Live or its recording the next day on YouTube.

In a third, the researchers created their own streaming platform to show participants identical videos, manipulating whether the content appeared to be live or prerecorded.

The experiments provide evidence that watching an online performance in real time boosts several aspects of the viewing experience:

  • Connection. Viewers in one experiment felt 7 percentage points more connected to the performers in the live video. Another experiment showed the effect was even stronger when viewers believed no one else was watching.
  • Enjoyment. In another experiment, viewers enjoyed the live video 5 percentage points more than the prerecorded one.
  • Engagement. Real-time streams carried a “liveness lift.” Viewers chose to continue watching longer, and they were more willing to follow and subscribe to the live streamer’s channels.

A common factor underlying those effects was a heightened sense of presence, Ward says. “When we watch something live, we are psychologically transported there.

“It’s not that there’s actually something different about the video itself. It’s that we know that it’s live right now, and that breaks down barriers between our world and the world on the other side of the screen.”

Lessons for Liveness

One quality weakened the liveness effect: not being able to see a performer’s face. When viewers saw only a musician’s hands, they felt less connected, even though they were watching the same performance.

The findings have implications for marketers, platform developers, and content creators, Ward says. In an age when people increasingly meet their social needs online, going live can benefit streamers by motivating audience engagement.

As a follow-up, he’s working with a graduate student to study whether the liveness effect translates into greater brand trust or sales.

“From influencers to businesses, it’s about the experience of real people seeing other real people live and in the moment,” Ward says. “It makes you feel like you’re sharing something.”

The Liveness Lift: Viewing Live Streams Creates Connection and Enhances Engagement in Amateur Music Performances” is published in The Journal of Marketing.

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