A credit health study found that US consumers at the end of the year still struggled with loan balances and delinquencies
VantageScore, a consumer credit scoring system, reported that at the end of the year US consumers were still struggling with loan balances and delinquencies.
Through the December 2022 CreditGauge, a monthly analysis designed to track consumer credit health in the US, found that while inflationary pressure has subsided, there are signs that some consumers are struggling with their auto loans. and credit card accounts.
It also found that, as of late November, new credit card originations had slowed compared to last year during the all-important holiday shopping season.
According to CreditGauge data:
There was an increase in delinquency in car loan payments
Auto loan delinquencies in the 30 to 59 day past due category demonstrated an increase of 0.51% compared to the same period last year. This is still in line with pre-pandemic levels, but is an area to watch as consumers with lower credit scores could be more vulnerable to rising interest rates.
There was an increase in leverage
Overall average total balances increased 6% compared to November 2021 and increased 0.4% compared to October 2022. Overall credit card balances in November 2022 increased to $5,600 with average utilization rates of 30.2% in compared to $5,000 and 27.9%, respectively, in the previous year.
Increase in credit cards
Month over month, 3.46% of consumers opened a new credit card, a slight increase after a brief slowdown in October. However, on a year-over-year basis, new credit card account activity is still below November 2021 levels of 3.70%.
The analysis reports that the overall health of consumer credit remains stable with an average national VantageScore® credit score of 696 (a minor decline from 697, where it had held steady since March of this year).