VantageScore CreditGauge™ February 2024: Consumers Continued to Move "Up or Out" as VantageScore Prime Credit Tier Contracted By 1.1% Year Over Year

• Early-Stage Delinquencies Increased Again, First Time in Four Years Above 1%
  
  
• Overall, Balances Fell and Credit Utilization Dropped to Lowest Level in Almost Three Years as Healthy Consumers Effectively Managed Debt
  
  
• Auto Loan Originations Rose with Increased Inventory; Credit Card, Mortgage and Personal Loan Originations Slowed as Lenders Pulled Back and High Interest Rates Continued

SAN FRANCISCO, March 27, 2024 /PRNewswire/ -- VantageScore, a leading national credit-scoring and data insights company, today released its February 2024 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score remained at 701. The lowest VantageScore 4.0 credit score is 300, while the highest score is 850. While the average consumer remained credit healthy, the number of consumers in the VantageScore Prime credit tier (661-780) shrank for the second consecutive month. The VantageScore Prime credit tier contracted by 1.1% year over year with the largest moves "up" into VantageScore Superprime (781-850) or "out" into VantageScore Subprime (300-600).

"The tale of two consumers is becoming more pronounced," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. "This trend could complicate the Federal Reserve's efforts to effectively engineer a smooth landing because VantageScore Superprime consumers are still spending and borrowing while VantageScore Subprime consumers are finding it increasingly difficult to stay current on credit payments."

Key insights for February 2024 CreditGauge data include:

DELINQUENCIES ROSE ACROSS ALL VANTAGESCORE CREDIT TIERS – Delinquencies climbed across all VantageScore credit tiers and products in February 2024 (Auto Loan, Credit Card, Mortgage, and Personal Loan). Overall early-stage delinquencies surged again, marking a 0.24% uptick year-over-year. Delinquencies also rose 0.06% month over month, from 0.98% in January 2024 to 1.04% in February 2024. The last time early-stage delinquencies rose above 1.0% was four years ago in February 2020, when they registered 1.07%.

AVERAGE BALANCE, UTILIZATION RATE FELL MONTH OVER MONTH – Overall balances remained high, increasing by $1,526 year-over-year; however, balances decreased by $417 in February 2024 compared to January 2024. Credit Card, Mortgage and Personal Loan balances drove the decline, which could reflect seasonal patterns and the potential of tax refunds for early filers. The overall utilization rate continued to decline for the second consecutive month, dropping by 0.3% from January 2024. At 52.2%, credit utilization reached the lowest level in nearly three years (since May 2021), indicating that consumers overall continued to manage their credit responsibly.

NEW ACCOUNT ORIGINATIONS DECLINED ACROSS ALL PRODUCTS EXCEPT AUTO – In February, new account originations declined across all products except Auto Loans, which rose modestly for the first time in nearly five months as high inventory levels drove incentives and promotions. Personal Loan originations declined the most month over month, down 0.31%. This was likely due to stricter lending requirements combined with higher interest rates. Mortgage originations saw their fifth consecutive month of decline, while Credit Card originations fell across all generations except Silent (1928-1945), which saw a minor increase.

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^®
VantageScore is a leading credit-score model development company that generates the most inclusive, innovative, and predictive models used in the consumer-credit marketplace. VantageScore is used by 8 out of the top ten banks in the U.S. and more than 3,000 fintechs and consumer websites. In 2022 over 19 billion VantageScore credit scores were used to assess people for credit products like Credit Cards, Auto Loans, Personal Loans and Mortgages, representing a 30% increase over 2021.

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

SOURCE VantageScore