Third Quarter 2025 Consumer Credit Trends Indicate Moderate Debt Growth for Auto and Student Loans ATLANTA, Nov. 5, 2025 /PRNewswire/ -- Equifax® (NYSE: EFX)Â has released its Market Pulse Third Quarter U.S. Consumer Credit Trends, which includes U.S. national consumer credit data and trends through September 2025 sourced from Equifax data. According to Equifax, delinquency on total U.S. consumer debt inched up to 1.562% in September, a slight increase from 1.517% at end of the second quarter in June 2025. ...

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]