- Inflation increasingly impacts ‘white-collar’ workers and their credit payments
- New credit accounts decreased across most loan products for the second straight month, led by declines in new Credit Cards and Personal Loans
- Credit Card account balances remained flat as increased borrowing paused in October amid economic uncertainty
VantageScore, a leading national credit-scoring company, today released its October 2024 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score decreased slightly but held at 702 for the eighth consecutive month. The lowest VantageScore 4.0 credit score is 300, while the highest score is 850. Overall, the percentage of consumers with newly opened credit accounts dropped for the second month in a row, and credit card balances remained flat compared to the month before.
Low-income consumers are no longer the only group facing challenges. More affluent and white-collar workers are also facing pressure from inflation and a less healthy job market,” said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. “This economic reality will weigh on the holiday shopping season.
Key insights for October 2024 CreditGauge include:
WHITE-COLLAR CONSUMERS INCREASINGLY EXPERIENCED RISING CREDIT DELINQUENCIES: VantageScore high-income ($150k+) credit delinquencies in the 60-89 Days Past Due category more than doubled from January 2023 to October 2024. This increase significantly outpaced the growth among middle-income earners (+63%) and low-income earners (+25%), underscoring that even high-income groups are feeling the effects of financial strain, compounded by the ongoing slump in white-collar employment.
ORIGINATIONS DECLINED ACROSS ALL PRODUCTS: Newly opened credit accounts fell across all products month-over-month. New Credit Card, Personal Loan and Auto Loan accounts all declined sharply compared to September 2024. Credit Cards fell the most among all credit products, dropping 0.25% compared to September 2024. The decline reflected seasonal patterns as consumers paused opening new accounts due to market uncertainty ahead of the U.S. National elections.
CREDIT CARD ACCOUNT BALANCES REMAINED FLAT; MORTGAGE BALANCES HIT NEW HIGH: In October 2024, overall balances hit a new CreditGauge record for a fourth consecutive month, driven by Mortgage loans. Overall credit balances rose by $384 (+0.4%) month-over-month and $2,218 (+2.1%) year-over-year to $105,600. Credit Card balances remained flat at $6,335 in October 2024 compared to September 2024, reflecting cautious spending by consumers ahead of the election and the holidays. The average Mortgage balance rose by $6813 (+2.6%) year-over-year from October 2023 to October 2024 driven by higher interest rates and higher loan amounts due to elevated home prices. The overall amount of available credit that borrowers used remained steady at 51.7%.
To view the full CreditGauge report, visit the CreditGauge page.
