Delinquencies Declined Month-over-Month for First Time Since 2021

Delinquencies Declined Month-over-Month for First Time Since 2021

VantageScore CreditGauge™ March 2024: Delinquencies Declined Month-over-Month for First Time Since 2021 Across all Days Past Due Categories as the Average VantageScore Credit Score Increased to 702

SAN FRANCISCO, April 29, 2024 /PRNewswire/ — VantageScore, a leading national credit-scoring and data insights company, today released its March 2024 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score rose from 701 to 702 in March. The lowest VantageScore 4.0 credit score is 300, while the highest score is 850. For the first time since May 2021, delinquencies fell across all Days Past Due (DPD) categories and all loan products (Credit Card, Personal Loan, Auto Loan and Mortgage) on a month-over-month basis. The across-the-board decline in late payments can be partly attributed to seasonal patterns as consumers used tax refunds to pay down debt. Despite the reversal, the delinquency rates were still higher than a year ago and at levels observed around the start of the pandemic.

• Delinquencies Dipped as Consumers Used Tax Refunds to Pay Down Debt and Continued to Effectively Manage Spending
  
• Credit Utilization Dropped for Third Straight Month, Balances Rose Modestly, Signaling Trend of Rising Credit Limits from Banks and Lenders
  
• Auto Loan, Mortgage Originations Rose; Credit Card and Personal Loan Originations Continued to Decline Month-over-Month

“Consumers are watching for signs that the economy is nearing that Goldilocks ‘just right’ moment, but we are not there yet,” said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. “While consumer delinquencies saw a positive trend in March resulting in the average VantageScore credit score going up by a point, the state of consumer health remains uncertain as inflation and high borrowing costs persist.“

Key insights for March 2024 CreditGauge data include:

DELINQUENCY RATES DECLINED ACROSS ALL PRODUCTS, LED BY AUTO – In March, delinquencies declined for the month across all DPD categories and all products.  In the 30-59 DPD category, all products recorded month-over-month declines, with Auto Loan delinquencies experiencing the most notable reduction, decreasing by 0.30% compared to February 2024. That development was also true in the 60-89 DPD and 90-119 DPD categories, where Auto Loan delinquencies declined month-over-month by 0.13% and 0.3%, respectively. Year-over-year, across all DPD categories and products, delinquency rates for the month were higher compared to March 2023.

UTILIZATION RATE FELL FOR THIRD STRAIGHT MONTH WHILE BALANCES ROSE – The overall credit utilization rate fell for a third consecutive month, dropping to 51.9%, the lowest level since April 2021. Overall credit utilization was also at the lowest level for the second time since CreditGauge began publishing data in January 2020. Account balances remained high but rose only modestly compared to February 2024. The minor growth in balances coupled with the decline in utilization rate was a result of banks and lenders increasing credit limits over the past 12 months.

MORTGAGE, AUTO LOAN ORIGINATIONS ROSE, OTHER PRODUCTS DECLINE – Auto Loan originations climbed for the second straight month, signaling a possible shift toward easier borrower qualifications for car loans amid a tough credit landscape. New mortgages rose by 0.04% compared to the previous month as the spring buying season began. New accounts for Credit Card and Personal Loans fell for the third consecutive month as consumers faced pressure from high interest rates and mounting debt.

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 Consumer 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 3,400 fintechs and consumer websites. In 2023 over 27 billion VantageScore credit scores were used to assess people for credit products like Credit Cards, Auto Loans, Personal Loans and Mortgages, representing a 42% increase over 2022.

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

SOURCE: VantageScore

Delinquencies Declined Month-over-Month for First Time Since 2021 – Delinquencies Declined Month-over-Month for First Time Since 2021 – Delinquencies Declined Month-over-Month for First Time Since 2021

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