Core Insights - Equifax's Market Pulse report indicates a moderate increase in U.S. consumer debt, reaching $18.03 trillion in September 2025, up from $17.91 trillion in August 2025, with a delinquency rate of 1.562% [1][6]. Consumer Debt Trends - Total consumer debt increased by 0.7% month-over-month and 2.7% year-over-year in September 2025 [6]. - Mortgage debt rose to $13.33 trillion in September 2025, reflecting a 0.7% increase from August 2025 and a 3.7% increase year-over-year [7]. - Non-mortgage debt, which includes auto loans, bankcards, and student loans, reached $4.70 trillion, showing a 0.4% month-over-month increase and a slight 0.2% year-over-year increase [7]. Auto Loans and Leases - Auto loan and lease debt totaled $1.68 trillion in September 2025, up 1.4% from September 2024, with lease balances growing by 11.5% to $95.8 billion [5]. - Delinquency rates for auto loans increased to 1.64%, while lease delinquencies slightly decreased to 0.46% [5]. - Rising costs of car ownership are leading consumers to prefer leasing over purchasing vehicles [5][2]. Bankcard and Private Label Credit Cards - Bankcard balances reached $1.08 trillion, a 4.0% increase from September 2024, with accounts rising to 586.2 million [5]. - The delinquency rate for bankcards increased slightly to 2.83% but decreased from 3.01% year-over-year [5]. - Private label credit card balances and accounts saw significant declines, with balances down 11.7% and accounts down 25.5% year-over-year [5]. Student Loans - Student loan delinquencies have stabilized around 18%, with severe delinquency rates at 16.32% in September 2025, up from 0.79% a year ago [5]. - Outstanding student loan debt rose to $1.34 trillion, a 4.8% decrease compared to September 2024, with accounts down 8.6% [5].

Investment Rating - The report indicates a positive outlook on the corporate credit cycle, suggesting a shift in momentum with increased M&A and LBO activity, although it starts from a benign point [5][9]. Core Insights - US consumer spending growth is slowing but remains solid, supported by elevated net worth and asset growth outpacing liabilities [43]. - The credit cycle is gaining momentum with busy issuance in both investment-grade (IG) and high-yield (HY) markets, with September IG issuance reaching $227 billion, significantly above seasonal averages [6][43]. - Delinquencies are rising in subprime credit while stabilizing in prime credit, indicating a bifurcation in credit quality [43][23]. Summary by Sections Corporate Credit - The credit cycle is moving up a gear with significant M&A and LBO announcements, although current activity levels are below historical trends [5][9]. - High-yield issuance in September exceeded $55 billion, marking it as the third-largest month on record [7][8]. - Defaults remain elevated despite tighter spreads, with a trailing 12-month default rate for high-yield loans at 4.2% [12][11]. Securitized Credit - There is a notable divergence in delinquency rates between prime and subprime segments, with prime delinquencies stabilizing while subprime delinquencies are on the rise [43][23]. - Transition rates do not indicate further deterioration in credit quality, suggesting a potential stabilization in the market [28]. Economic Overview - Real personal consumption expenditure growth is slowing, but remains robust, particularly among high-income cohorts whose net worth is significantly higher [34][43]. - Labor income growth has decelerated, which may impact real spending in the future [38][43].

Core Insights - The national average FICO score has decreased to 715, marking a two-point drop from 2024 and the second consecutive year of decline [1] - The decline in credit scores is attributed to economic factors stemming from the pandemic, including rising prices and higher interest rates [2][6] Consumer Behavior - To cope with the high cost of living and increased student loan payments, 24% of Americans have opened new credit cards and 13% have taken personal loans in the past year [3] - Credit has become essential for many consumers during this period of economic uncertainty [3] Delinquency Rates - Delinquency rates for auto loans, student loans, personal loans, and credit cards have risen, with student loan delinquency reaching an all-time high of 3.1%, affecting 6.1 million consumers [4] - The auto loan delinquency rate has increased by 24% since 2021 [4] - Delinquency rates are critical as they constitute 35% of the FICO score calculation, with consumers having at least one delinquency seeing an average score drop of 69 points [5] Economic Context - Current delinquency rates are comparable to levels seen during the Great Recession, indicating economic conditions more aligned with a recession than expansion [6] Demographic Impact - Gen Z has been particularly affected by credit score fluctuations, with an average score of 679, which is 39 points lower than other age groups [7]

Risk in Force Composition - The original risk written in 2025 was $6.9 billion, with 98.1% remaining [6] - The original risk written in 2004 and prior was $181.5 billion, with only 0.2% remaining [6] - For loans originated in 2025, 50.6% had a FICO score of 760 and above [6] - Loans with an original LTV between 90.01% and 95.00% constitute 53.5% of the primary risk in force [6] Delinquency and Losses - The total number of delinquent loans is 24,444 [7] - Risk in force delinquent is 1.9% [7] - Ever-to-date claims paid for the 2005-2008 origination years reached $13.3913 billion [7] PMIERs and Risk Distribution - Total Primary Minimum Required Assets are $5.758 billion [9] - Of the $418 million required for 2025, $192 million is retained, $162 million is covered by Quota-Share Reinsurance (QSR), and $63 million by Excess-of-Loss (XOL), resulting in 54% ceded [9] - The company has a $2.5 billion Reinsurance Benefit [9] Financial Performance - Net losses incurred for Q2 2025 were $(3) million [11] - Direct primary loss reserves totaled $392 million in Q2 2025 [12]

Market Trends & Industry Dynamics - Office CMBS (Commercial Mortgage-Backed Securities) delinquency rate reached 11.08% [1] - Over 1 in 10 office buildings with securitized loans are not making payments [1] - The current delinquency rate is the highest level ever, surpassing the Global Financial Crisis (GFC) [1] Potential Risks - Defaults are expected to occur following the high delinquency rate [1]