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Insights from VantageScore's November 2024 CreditGauge

As the holiday season approaches, VantageScore, a prominent national credit-scoring firm, has released its November 2024 CreditGauge report, providing an in-depth look at the current landscape of U.S. consumer credit. This month’s analysis sheds light on various facets of the economy, particularly how inflation and credit usage affect consumer behavior during this crucial shopping period.

Consumer Credit Trends

In November 2024, the average VantageScore 4.0 credit score saw a slight uptick, maintaining a value of 702—an encouraging sign in a challenging economic climate. Credit scores range from a low of 300 to a high of 850. Despite this positive note, other metrics reflected a more cautious approach by consumers.

Total credit card balances increased marginally, with an overall year-over-year growth of just $197, culminating in an average credit card debt of $6,400 per borrower. Notably, these figures indicate a restrained start to the holiday shopping frenzy, which traditionally sees a spike in spending.

Credit Card Origination and Balances

The report highlighted a 0.15% increase in new credit card accounts when compared to October 2024. However, this figure remains significantly lower than the same period last year, underscoring a trend of hesitance among consumers regarding opening new lines of credit. Additionally, overall credit balances fell by $261 (-0.25%) month-over-month, marking just the fourth instance of decreased balances this year.

The consumer sentiment appears to reflect heightened caution in financial operations. The average credit utilization rate, which stands at 30.8%, remains stable as borrowers seem to prefer paying down existing debt rather than accumulating new credit.

Delinquency Rates Steady

Interestingly, early-stage credit card delinquencies have remained stable across all categories. Delinquencies in the 30-59 Days Past Due category showed a slight improvement, while those 60-89 Days Past Due remained unchanged. The 90-119 Days Past Due class saw a marginal increase, yet overall, these metrics suggest a manageable level of credit risks during the holiday period.

Economic Impact of Inflation

Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore, stated, “As this year's early holiday spending season kicked off, consumers showed some restraint in opening new lines of credit and increasing their credit card balances.” This sentiment resonates with numerous consumers who find themselves navigating the complexities of sustained inflation affecting their purchasing power, regardless of income levels.

In summary, while the average credit score has risen slightly, the overall financial behavior among U.S. consumers indicates a notable shift toward caution. The modest rise in credit card usage and the stable delinquency rates provide a mixed picture as consumers brace for holiday spending amid economic uncertainty. As the holiday season progresses, stakeholders will be keenly monitoring the potential impact on retail sales and overall economic health.

For a comprehensive look at past reports and more analytical tools, interested parties can explore the VantageScore website, which offers access to a host of resources including interactive tools that track credit metrics over time.

About VantageScore

VantageScore stands as the fastest-growing credit scoring entity in the country, known for its innovative scoring models. In 2023 alone, the usage of VantageScore surged by 42%, exemplifying its growing prevalence among major financial institutions. VantageScore 4.0 plays a crucial role in modern lending practices, contributing significantly to the evolving landscape of consumer credit. The firm, a joint venture among the Nationwide Consumer Reporting Agencies, is steering the direction of credit evaluation forward, fostering inclusivity and enhancing access for consumers across diverse backgrounds.