VantageScore CreditGauge™ December 2024: Credit Card Balances Climbed in Line with Inflation as Consumers Proceed with Credit Caution

• Credit Card Balances Grew 2.9% Year-Over-Year, in Line with Annualized Inflation
• Overall Delinquencies Inched Higher As Consumers Continued to Face Economic Headwinds
• Overall Credit Utilization Declined Year-Over-Year

SAN FRANCISCO, Jan. 28, 2025 /PRNewswire/ -- VantageScore, a leading national credit-scoring company, today released its December 2024 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score remained at 702. The lowest VantageScore 4.0 credit score is 300, while the highest score is 850. Delinquencies entered 2025 near their highest levels over the past five years across all Days-Past-Due (DPD) periods and across the lowest three VantageScore credit tiers. Credit Card balances were up 2.9%, the most in a year. However, much of the increase can be traced to inflation, and adjusted for inflation, card balances were flat. In a sign of renewed credit caution, overall consumer credit utilization dropped one full percentage point to 51.6%, the second-lowest credit utilization rate in 2024.

"Consumer spending offers a mixed picture as we enter 2025," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. "Though consumers continued to spend in 2024, it was largely in line with the inflation rate, indicating they entered the new year leveraging their credit mostly for necessities. Delinquencies remain a concern as they sit near the highest levels since just before the pandemic and continued to worsen among the riskiest credit tiers, a sign that consumers are still feeling strained and are spending in moderation."

Key insights for December 2024 CreditGauge include: 

CREDIT CARD BALANCES CLIMBED: Credit Card balances rose only 2.9% compared to December 2023, in line with the annual inflation rate of 2.9% for 2024. This indicates cautious credit usage by consumers looking to plug the hole in their wallets left by inflation and limiting spending on discretionary items.

OVERALL DELINQUENCIES GREW IN 2024: Late payments increased across all DPD periods in December 2024 compared to December 2023. Year-over-year, delinquencies rose across all VantageScore credit tiers except VantageScore Superprime (781-850). Throughout 2024, consumers faced several economic headwinds, including higher prices, rising interest rates, and a softening labor market. These challenges contributed to the overall rise in delinquencies.

OVERALL CREDIT BALANCES DECREASED YEAR-OVER-YEAR: Year-over-year, the balance-to-loan ratio decreased by 1.0% to 51.6% compared to December 2023. This indicates that although consumers still have available credit at their disposal, they are exercising restraint in using it. Overall credit balances also fell 0.9% or $952 in December 2024 compared to the month before. This decline was primarily driven by consumers paying down mortgage debt and refraining from purchasing new homes.

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