VantageScore CreditGauge™ September 2024: Credit Delinquencies Rose, New Lending Declined as Warning Signs Flash Ahead of November 5th Election

"September's CreditGauge provides the final snapshot of consumer credit health before the U.S. elections, revealing that many consumers are putting their new borrowing on pause," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. "The slow down in new lending and borrowing is notable given that the Federal Reserve cut interest rates in September in an effort to stimulate access to new credit for consumers and corporates."

Key insights for September 2024 CreditGauge include: 

CREDIT DELINQUENCIES INCREASED BROADLY – In September 2024, late payments across all days past due (DPD) categories rose compared to September 2023 and all stages except 90-119 DPD compared to August 2024. Early-stage (30-59 DPD) credit delinquencies rose sharply by 0.13% month-over-month, the second-biggest monthly gain in 2024.  Late-stage payments for mortgages rose the most year-over-year by 0.05%, followed by Credit Cards, which increased by 0.04%. Credit delinquency rates also rose across all VantageScore credit tiers year-over-year.

PERCENTAGE OF CONSUMERS WITH NEW LOANS DECLINED – Newly opened credit accounts fell across all products year-over-year. Across all credit products, month-over-month new accounts slowed, except for mortgages. New Credit Card accounts fell 0.26% compared to September 2023, the most among all credit products. The drop reflected lower demand for loans among consumers and an increased perception of risk among lenders. 

CREDIT ACCOUNT BALANCES HIT NEW HIGH – In September 2024, overall balances hit a new CreditGauge record for a third consecutive month. Overall average credit balances rose by $2,206 (+2.1%) year-over-year and by $163 (+0.16%) month-over-month. The amount of available credit that borrowers used – the credit utilization rate – fell slightly. This shows consumers maintained steady credit usage relative to their loan amounts as historically high interest rates tended to increase loan balances.

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