“Consumer Debt and Credit Analysis: 2023 Insights”

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Average Credit Score in the U.S. Increases to 715

In 2023, the average FICO® Score in the U.S. rose to 715, reflecting stable creditworthiness among consumers. This one-point increase from 2022 indicates a resilient financial landscape despite rising interest rates.

U.S. Consumer Debt Snapshot

Consumer debt levels saw a modest increase in 2023. The average total debt balance grew by $2,300 to $104,215, a 2.3% rise. This increase was relatively modest compared to the 3.7% inflation rate over the same period.

Loan Interest Rates Jumped in 2023

Interest rates for various loan products surged in 2023. Mortgage rates for a 30-year fixed rate increased to 7.31%, while auto loan rates for a five-year new car loan jumped to 7.88%. Credit card rates also saw a significant rise, reaching 22.77%.

Average Total Debt Levels up in Most States

In 2023, average total debt per consumer increased across most states. States with higher real estate prices, such as California and Washington, typically have larger debt loads due to the significant impact of housing costs.

Credit Utilization and Delinquency Rates Continue to Increase (but Slowly)

Average credit card debt increased by 10% in 2023, with credit utilization rates rising from 28% to 30%. Delinquency rates also saw a slight increase, but they remain below pre-pandemic levels.

What Borrowers Can Expect in 2024

Looking ahead to 2024, borrowers can anticipate a potential decline in interest rates for consumer loans. The Federal Reserve is expected to lower rates, which could benefit borrowers by reducing borrowing costs. However, the exact timing of these rate cuts remains uncertain.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team is here to assist you with the best mortgage solutions tailored to your needs.

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