VantageScore CreditGauge™ November 2023: Consumer Financial Stress Reflected in Higher Delinquencies, Holiday Spending "Credit Hangover" Increasingly Likely

• Overall Year-Over-Year Delinquencies Rose to 12-month Highs Across All Days Past Due (DPD) Categories
  
  
• Early-Stage Personal Loan Delinquencies Up Sharply, Surpassing Pre-Pandemic Level for the Second Time this Year
  
  
• Credit Card Balances Rise: Overall Credit Card Balances Increased by 9% Compared to a Year Ago

SAN FRANCISCO, Jan. 4, 2024 /PRNewswire/ -- Today, VantageScore released its November 2023 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. For the fifth consecutive month, the average VantageScore credit score held steady at 701. While overall credit health has remained relatively strong, many lower VantageScore credit tier consumers are increasingly financially stretched at year-end, with millions relying on personal loans or asking lenders for higher credit card limits to cover expenses and holiday spending. Increased reliance on these higher interest rate accounts raises the concern that some may face increased pressure to make their monthly payments in subsequent months.

Key VantageScore CreditGauge findings for the month included: 

DELINQUENCIES ROSE ACROSS ALL CREDIT SEGMENTS – In November, delinquencies remained elevated from a year ago across all loan categories, with the Days Past Due (DPD) increasing by category from .68% to .90% (30-59 DPD), from .23% to .33% (60-89 DPD), and from .10% to .15% (90-119 DPD) year-over-year. Additionally, all VantageScore credit segments exhibited signs of stress for the month compared to a year ago.  The only exception to the increase in late payments was observed in the VantageScore Superprime segment (781-850), which was only within the 60-89 DPD category. 

EARLY-STAGE PERSONAL LOAN DELINQUENCIES ABOVE PRE-PANDEMIC LEVELS AGAIN – Month-over-month early-stage delinquencies spiked .12% from .87% to .99%, which was the second time this year that delinquencies in this category surpassed pre-pandemic levels.  In November, personal loan delinquencies exceeded pre-pandemic levels across all DPD categories, with 30-59 DPD up .04%, and both the 60-89 and 90-119 DPD up .09% compared to January 2020.

CREDIT CARD BALANCES CONTINUED TO CLIMB – Compared to November 2022, credit card balances are up 9%.  Consumers appeared to exhibit confidence during the holiday shopping season, and with credit card interest rates at historic highs, the impact on balances is evident.  Credit card balances rose more rapidly than the rate of annualized inflation, as well as more rapidly than the rate of annualized wage gains. 

"There is a growing concern that some consumers' holiday spending is adding unsustainable levels of credit card and personal loan debt," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore.  "Consumers need to be vigilant when managing their debt obligations heading into 2024." 

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

About VantageScore CreditGauge™
CreditGauge is provided both as a monthly report to industry stakeholders as well as through a series of interactive tools at VantageScore.com. 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 represents the views and opinions of VantageScore and does not necessarily reflect or represent the views of the Nationwide Credit Reporting Agencies (NCRAs)-- Equifax, Experian, and TransUnion.

VantageScore CreditGauge content, including any estimated economic forecasts, is intended for informational purposes only. VantageScore is not responsible for the use of the information contained in the CreditGauge report, including any assumptions or conclusions drawn from its use.

VantageScore CreditGauge is part of a suite of digital tools available on VantageScore.com, which also includes Inclusion360™, RiskRatio™, and MarketGain™.

About VantageScore®
Over 3,000 banks, fintechs, and other companies use VantageScore credit scores every day to assess consumer creditworthiness. Last year, over 19 billion VantageScore credit scores were used, representing a 30% yearly increase. Most top 10 US banks, large credit unions, and leading fintechs use VantageScore credit scores in one or more lines of business, including credit cards, auto loans, personal loans, and more.

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

SOURCE VantageScore