Context is everything, including when it comes to data. Looking at delinquency rates published on Friday by VantageScore, if all you focused on was how much they changed from one month to the next — from November to December — the story would be pretty boring. For the most part, delinquency rates were unchanged. But, if you took a step back and looked at the year-over-year change, the story would be much different.
By The Numbers: If you look at the different credit tiers (prime, subprime, etc.), generational demographics (Baby Boomers, Millennials, etc.), or income level, the delinquency rate from December 2022 to December 2023 increased, significantly in some cases.
- For example, the delinquency rate of low-income credit card holders who were at least 90 days past due on their payments increased by 50% from December 2022 to December 2023.
- More than 9% of subprime credit card borrowers were between 30 and 60 days past due on their payments in December 2023, up from 8% a year earlier.
- While delinquency rates continued to trend higher, originations for credit cards and personal loans were also on the rise. While still lower than where they were a year ago, rising originations, when coupled with delinquency rates, usually indicates that more losses are on the horizon.
The Last Word: “As we begin a new year, the VantageScore monthly CreditGauge data points to weakening consumer finances, marked by higher delinquencies across many product and borrower segments,” said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. “What is less clear today is whether lenders will reduce their lending to a consumer that is credit healthy overall but showing modestly increasing signs of economic stress.”