Atif Mirza, VP of Digital at VantageScore, spoke with Dan Currell of the Digital Commerce Alliance for their Commerce Code Podcast, where they discussed the latest trends in consumer credit health. The group also discussed the most recent trend of higher earners feeling more pressure and what this means for the rest of 2024 and 2025.

“Americans continue to have good overall credit health, but we are seeing areas of concern, especially in the VantageScore Prime credit tier, with delinquencies among this group outpacing all other credit tiers,” said Mirza.

Mirza elaborated on some of the consumer credit health trends in October, including the increase in late-stage delinquencies, where consumers seem to be experiencing significant financial pressure.

According to the October 2024 VantageScore CreditGauge, early-stage delinquencies have improved slightly compared to the last month of September. However, late-stage delinquencies continued to increase year-over-year and month-over-month. Average loan balances generally rose, and especially in the mortgage sector, they’re reflecting larger loan amounts. However, both the balance-to-loan ratio and utilization rate declined for most products.

VantageScore’s latest CreditGauge report also indicates consumers are experiencing different economic pressures by generation, with Gen Z feeling the pinch the most.

“In the last year and a half, Gen Z saw higher utilization rates, especially in credit cards, across generations, as well as Millennials,” added Mirza. “However, Gen Z had the lowest rate of change among other age groups, whereas Gen X had the highest rate of change in 2024. Utilization rates showed a similar pattern. Now, if you look at who’s applying for new credit in originations, for example, Gen Z was the lowest compared to other generations.”

Listen to the podcast here.