VantageScore today released its May 2024 CreditGauge, a monthly analysis highlighting the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score held steady at a healthy 702 for the third consecutive month. For context, the lowest VantageScore 4.0 credit score is 300, while the highest score is 850.
The CreditGauge found that Gen Z consumers (born after 1997) and lower-income consumers experienced an uptick in credit card delinquencies, which rose in May 2024 compared to April 2024.
Delinquencies also increased among lower-income cardholders. This rise in credit dependency was driven by persistent inflation, rising rental costs, and elevated interest rates as they approached the higher spending months of summer.
“Among American consumers, the bifurcation in consumer credit health continued, as the younger and less affluent continued to be among the most impacted by continued inflation and high interest rates,” said Executive Vice President and Chief Digital Officer at VantageScore, Susan Fahy. “In general, consumers are more disciplined with their finances in the first half of the year, coming off the high credit utilization holiday shopping season. That discipline started to fade in May as some consumers faced rising rents and competing priorities when it comes to meeting debt obligations.”
VantageScore Superprime and Subprime credit tiers continued to expand year-over-year, according to the report. During May 2024, VantageScore's Superprime credit tier increased by 0.7% to 31.2% and VantageScore's Subprime credit tier increased by 0.4% to 18.3% compared to May 2023.
The VantageScore Prime credit tier contracted to 33.1% compared to 34.0% in May 2023. Overall in May 2024, more consumers migrated to very good credit health while relatively fewer others moved into poor credit health. With these moves, the middle tier, VantageScore Prime, continued to be hollowed out.
However, early-stage mortgage loan delinquencies rose more than a quarter percentage point to a rate of 0.92% in May 2024 compared to May 2023.
