VantageScore CreditGauge™ August 2024: Relief Comes Just in Time as Balances Hit Four-Year High and Borrowers Increased Reliance on Credit

• Average Credit Card balance rose to $6,358, the highest year-to-date; Credit Card utilization also rose month-over-month
  
  
• New credit account growth increased month-over-month across all products except Mortgage
  
  
• Early-stage delinquency rates moderated but remained elevated overall as consumers juggled competing payments

SAN FRANCISCO, Sept. 26, 2024 /PRNewswire/ -- VantageScore, a leading national credit-scoring company, today released its August 2024 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score remained at 702 but inched closer to its first decline in over a year. The lowest VantageScore 4.0 credit score is 300, while the highest score is 850. Borrowers leaned more heavily on their credit as loan balances hit their highest level in more than four years.

"Last week's rate cut came just in time for many borrowers who may have seen their personal finances weaken over the last two years," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. "Unfortunately, many of these same borrowers now face the end of the student loan 'on-ramp,' adding additional expenses to juggle and prioritize. These coinciding September events will impact millions of Americans' credit scores – either positively or negatively – in the months ahead."

Key insights for August 2024 CreditGauge include:

AVERAGE LOAN BALANCES GROW, LED BY CREDIT CARDS – Overall loan balances rose to the highest level in more than four years. In August 2024, average balances rose by $1,811 year-over-year compared to August 2023, and by $353 month-over-month compared to July 2024. Average Credit Card balances rose to a new high of $6,358 in August 2024, up 4.5% from a year ago. Auto Loan and Mortgage average balances also rose year-over-year, while Personal Loan balances held steady. Overall balance-to-loan ratios ticked up slightly to 51.7% in August 2024 compared to 51.6% in July 2024, reflecting back-to-school shopping and consumer price sensitivity. The Credit Card utilization rate rose month-over-month to 31.04% in August 2024 compared to 30.81% in July 2024. The increase in Credit Card balances further underscored Americans' reliance on credit for expenses.

ORIGINATIONS ROSE ACROSS ALL PRODUCTS EXCEPT MORTGAGES – Month-over-month (August 2024 vs. July 2024), the percentage of newly opened accounts on file rose across Auto Loan, Credit Card and Personal Loan products, while Mortgage remained unchanged at 0.28%. Year-over-year, originations increased for Personal Loan and Auto Loan and decreased for Credit Card and Mortgage in August 2024 compared to August 2023. All product originations in August 2024 remained below pre-pandemic levels except Auto Loan, as consumer demand for car purchases continued to rise.

EARLY-STAGE DELINQUENCY RATES MODERATED BUT REMAIN ELEVATED VS. A YEAR AGO – In August 2024, overall delinquency rates across days past due (DPD) categories were higher than in August 2023. Delinquencies in the 30-59 DPD category declined month-over-month compared to July 2024 and only slightly increased by 0.1% in both the 60-89 DPD and 90-119 DPD categories. Year-over-year, the 30-59 DPD category stayed unchanged for the VantageScore Subprime, Nearprime and Prime Credit tiers, while the VantageScore Superprime tier experienced a slight increase compared to August 2023. Year-over-year, delinquency rates rose in the 90-119 DPD category across all VantageScore credit tiers. Delinquencies remain an area to watch as consumers begin to tackle additional debt obligations like student loan payments in upcoming months.

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.

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SOURCE VantageScore