VantageScore CreditGauge™ June 2024: Banks Expect Continued Growth, But Consumers Don't

• Originations reached record highs year-to-date across all generations and credit tiers as bank lending increased
  
  
• Delinquencies remained slightly higher than a year ago across all DPD categories driven primarily by younger, low-income consumers, signaling continued stress
  
  
• Balance and utilization rates rose slightly as inflationary pressures continued

SAN FRANCISCO, July 30, 2024 /PRNewswire/ -- VantageScore, a leading national credit-scoring company, today released its June 2024 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score remained steady at 702 for the fourth consecutive month. The lowest VantageScore 4.0 credit score is 300, while the highest score is 850. While originations were up across all products as banks extended credit to more consumers across credit tiers, high delinquency rates persisted across all Days Past Due (DPD) categories, an indication of continued stress among consumers.

"Despite a healthy average VantageScore credit score and increased originations, we are reaching a potential turning point in consumer credit health," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. "The modest increase in consumer delinquencies shows that many consumers continue to struggle. Rising unemployment rates and increased political uncertainty heading into the election season are also weighing on consumers and their financial decisions."

Key insights for June 2024 CreditGauge include: 

ORIGINATIONS ACROSS ALL PRODUCTS AT HIGHEST LEVELS YEAR-TO-DATE AS BANKS CONTINUED TO LEND, BUT CONSUMERS EXHIBIT STRESS – Originations across all product categories increased to their highest levels year-to-date. Personal Loans led the jump, increasing 0.22% from 2.68% in May 2024 to 2.90% in June 2024. Consumers in need of credit made use of Personal Loans to help extend their resources as needed. Credit Cards increased from 0.10% from 3.17% in May 2024 to 3.27% in June 2024. Auto Loan originations have been on a steady upward trend in 2024, climbing more than 0.3% year-to-date. New Mortgages rose slightly from 0.27% in May 2024 to 0.28% in June 2024. It is clear that lenders are extending new credit, but consumers are showing signs of increased stress. 

YEAR-OVER-YEAR DELINQUENCY RATES SLIGHTLY HIGHER; LONG-TERM CREDIT STRESS STILL EVIDENT – Late-stage delinquencies remained high as consumers struggled to recover from high inflation, elevated interest rates, and other economic pressures. Late-stage delinquencies in the 60-89 DPD category increased 0.08% to 0.35% in June 2024 compared to 0.27% in June 2023. The 90-119 DPD category rose 0.04% year-over-year to 0.15% in June 2024. Overall early-stage delinquencies (30-59 Days Past Due) increased 0.3% to 0.85% in June 2024 compared to June 2023.

BALANCE AND UTILIZATION RATES ROSE, A SIGN OF ONGOING INFLATION IMPACT ON CONSUMERS – Overall balances and utilization rates inched higher in June 2024 compared to the previous month. In June 2024, overall balances grew 2.2% year-over-year from June 2023 and 0.25% month-over-month from May 2024.

To view the full CreditGauge report, visit the VantageScore website.

About VantageScore CreditGauge™
CreditGauge is provided both as a monthly analysis to industry stakeholders as well as through a series of interactive tools at VantageScore.com, which also includes Inclusion360®, RiskRatio®, and MarketGain®. Stakeholders can use the tools to execute additional queries on credit metrics and compare current levels to a pre-pandemic timeframe, starting with January 2020. CreditGauge solely represents the views and analysis of VantageScore and does not necessarily reflect or represent the views of the Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion.

About VantageScore®
VantageScore is the fastest-growing credit scoring company in the U.S., and is known for the industry's most innovative, predictive, and inclusive credit score models. In 2023, usage of VantageScore increased by 42% to more than 27 billion credit scores. More than 3,400 institutions, including 8 of the top 10 banks, use VantageScore credit scores to provide consumer credit products including credit cards, auto loans, personal loans and mortgages. The VantageScore 4.0 credit scoring model scores 33 million more people than traditional models. With the FHFA mandating the use of VantageScore 4.0 for Fannie Mae and Freddie Mac guaranteed mortgages, the company is also ushering in a new era for mortgage lending and helping to close the homeownership gap.

VantageScore is an independently managed joint venture company of the three Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion.

SOURCE VantageScore