FOR IMMEDIATE RELEASE
March 24, 2023
Contact: Jeff Richardson
VantageScore
jeffrichardson@vantagescore.com
(332) 222-0140
NEW VANTAGESCORE CREDITGAUGE HIGHLIGHTS INCREASING CONSUMER CREDIT DELINQUENCIES
February 2023 CreditGauge™ Shows Lenders Tightening Credit Despite Relatively Stable Consumer Credit Health
San Francisco, CA. (March 24, 2023) – VantageScore released today the latest February 2023 CreditGauge, a monthly analysis that tracks consumer credit health in the United States.
The new February data shows that lenders reduced access to new credit offerings for consumers despite a relatively high average consumer VantageScore of 701, based on the range of 300-850. The CreditGauge data also shows that consumers continued to miss credit payments at a modestly increasing rate, which is likely a reflection of how continuing inflation and higher interest rates are increasingly impacting some consumers’ ability to stay current on their loan obligations. Delinquency rates are slowly rising across the board. For example, the auto finance sector experienced early-stage delinquency rate increases of 0.39% as compared to the same period last year.
As a result of these shifts, lenders appear to have become more cautious about new consumer credit account originations despite relatively stable consumer credit health.
Key findings from the most recent CreditGauge analysis include:
LENDERS DEMONSTRATE NEW CAUTION: Lenders appear increasingly concerned about credit quality despite consumer credit scores remaining relatively high by historical standards. Month-over-month new credit account activity slowed for credit cards, personal loans, and mortgages. New auto loan issuance was flat as compared to the prior month. The slowdown in new account activity that first appeared in January 2023 continued into February for most credit products.
UPTICK IN LATE PAYMENTS: While the overall percentage of borrowers with late payments remains low, delinquency rates continued to rise in February 2023 when compared to the same period last year. There was a rise in delinquency rates in all Days Past Due (DPD) categories (30, 60 and 90 DPD) for all VantageScore SubPrime, NearPrime, and Prime credit tiers as compared to February 2022.
CONSUMER CREDIT HEALTH REMAINS STABLE: Despite some deteriorating trends, consumer credit health remains strong by historical standards. In February, the average VantageScore 4.0 credit score increased by 1 point compared to January 2023 and 4.2 points higher than February 2022. The year-over-year increase in the average VantageScore 4.0 credit score is due in part to the removal of medical debt from the VantageScore model which occurred in January 2023.
To view the full CreditGauge report, visit the VantageScore website.
ABOUT CREDITGAUGE POWERED BY VANTAGESCORE:
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 and opinions of its affiliates and owners, including the Nationwide Credit Reporting Agencies (NCRAs), Equifax, Experian, and TransUnion.
About VantageScore Solutions
VantageScore Solutions develops consumer credit scoring models that combine the need for both financial inclusivity and dependable predictiveness across all scoring ranges. Known as an industry thought leader, the company’s most recent models score approximately 94 percent of all adults 18 and older – including 33 million more people than conventional models – without sacrificing safety and soundness. As a result, lenders using VantageScore can extend credit to those who have been historically marginalized, including minority and lower-to-middle income Americans. VantageScore credit scores are used by thousands of lenders, landlords, utility companies, telecom companies, and many others to determine creditworthiness. Additionally, tens of millions of consumers rely on free access to their VantageScore credit scores to monitor their own creditworthiness.
VantageScore Solutions was launched in 2006 and is owned by America’s three NCRAs – Equifax, Experian, and TransUnion. Using a patent-protected tri-bureau methodology, VantageScore delivers time-tested, innovative, and more consistent credit scoring models across all three NCRAs.