Equifax Data Shows US Consumer Debt Accelerating
Equifax's latest Market Pulse data shows that U.S. consumer debt is accelerating. Delinquency rates for various loan and credit products also remain above pre-pandemic levels, providing new data for credit forecasting and risk scoring models.
- Total U.S. consumer debt reached $18.2 trillion by the end of 2025, a 3.7% increase from the previous year, with mortgages accounting for $12.8 trillion of that total. - While delinquency rates for most credit products have eased from recent highs, they remain above pre-pandemic levels. Notably, 90-day mortgage delinquencies rose by 28.8% compared to the previous December. - Auto loan balances hit $1.685 trillion in December, and severe delinquencies (60+ days past due) saw a slight year-over-year increase. The rise in auto delinquencies is attributed to higher vehicle prices and increased interest rates. - Fintech lenders are increasingly using alternative data sources beyond traditional credit reports to assess risk. This includes leveraging telco, pay TV, and utilities data, which Equifax provides on over 191 million customers. - Machine learning and AI are being deployed for more accurate predictive default modeling and fraud detection in credit risk assessment. These technologies analyze vast datasets to identify high-risk borrowers earlier than traditional methods. - A "K-shaped" economic divide is becoming more pronounced, with higher-income consumers benefiting from asset inflation and credit availability while others face increasing financial pressure. - Subprime borrowers are showing signs of stress; the subprime share of first mortgage debt increased by 12.4% in December, although subprime credit card utilization remained flat. - The renewed enforcement of student loan repayments, combined with inflation and high borrowing costs, may alter traditional payment hierarchies, where consumers historically prioritized mortgage and auto loan payments.
