VantageScore CreditGauge™ September 2023: Overall Delinquencies Increased to New 12-Month High Across All Days Past Due Categories

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Oct 31, 2023, 08:00 ET

Year-Over-Year, Overall Credit Card Delinquencies Surpassed Levels Recorded in September 2022 Across All Days Past Due Categories
Mortgage Originations Fell YOY Across Generations, with VantageScore Prime Consumers Approved Most Often

SAN FRANCISCO, Oct. 31, 2023 /PRNewswire/ -- Today, VantageScore released its September 2023 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore credit score held steady in September for the third consecutive month at 701. Throughout 2023, credit health has been relatively strong, and the volume of VantageScore Subprime consumers has remained stable. Key findings for the month included:

VantageScore CreditGauge - September 2023 Early Stage Delinquencies (Overall)

ACROSS ALL PRODUCTS EARLY-STAGE DELINQUENCIES RECORDED NOTABLE INCREASE: For the month, early-stage delinquencies spiked from 0.84% in August to 0.91% in September across all consumer loan products. The 0.7% rise in the 30-59 Days Past Due (DPD) category was the second sharpest monthly increase this year, exceeded only by June with a 0.11% rise. Since May, overall delinquencies have steadily increased across all DPD categories, recording a new 12-month high in September. Except for the VantageScore Superprime segment, consumers in all other credit segments displayed signs of payment difficulties as delinquency rates continued to climb.

LOWER SCORING CONSUMER CREDIT CARD DELINQUENCIES PEAKED, WHILE HIGHER SCORERS DEMONSTRATED CREDIT RESILIENCY: Overall, in the 30-59 DPD and 60-89 DPD categories, credit card delinquencies rose last month, while late-stage delinquencies remained stable compared to August. VantageScore Subprime and Nearprime segments recorded higher delinquency rates compared to a year ago across all Days Past Due categories, while VantageScore Prime and Superprime continued to demonstrate good credit health.

MORTGAGE ORIGINATIONS DECLINED, IMPACTING GEN Z MOST: The steady rise in mortgage rates to near 20-year highs has impacted all home buyers. Mortgage originations fell across generations, with Gen Z seeing the greatest year-over-year decline in September 2023, falling by 0.38%. Gen Z continued to feel squeezed by inflation, student loan obligations, and a higher level of financial instability than other generations. While overall mortgage originations were low, VantageScore Prime consumers had the highest volume of newly approved mortgage applications (0.5%).

"Delinquencies have continued their overall trajectory upward since May, a clear sign that consumers are feeling the pressure of inflation and rate hikes," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. "The month-over-month increase we've seen over the last four months in early-stage delinquencies has led to a consistent and corresponding rise in later-stage delinquencies in the following month. Lenders should, therefore, be cautious as they head into the holiday shopping season as new originations could invite increased credit risk."

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