May Update: Consumer Unsecured Outperforms Again, Auto Slips, Credit Concentration Hits Historic Levels

Quick Insights

Consumer Credit Concentration Surges

• The top 1% of earners now hold nearly 40% of all consumer credit, the highest share in modern history.

• 94% of per-household consumer credit growth over the past five years has occurred in the top 20% income group—with an an astounding 84% concentrated among the top 1%.

• For the third consecutive quarter, credit growth was negative across all income cohorts except the lowest—largely due to base effects.

Consumer Unsecured Maintains Momentum

• 30+ Impairments rose just 6 bps, outperforming the 10-year seasonal average by 2.5×

• Cure rates improved materially, up 210 bps MoM

• CDRs were the only metric to underperform, but remain near pre-COVID levels

• Top Grade ROIs remain strong, but elevated prepayments are narrowing the gap

• Lower-FICO loans now consistently outperforming higher-FICO loans in 2024 vintages

Subprime Auto Weakens Again

• Charge-offs rose for a second consecutive month, defying usual seasonal trends

• 30+ Impairments increased 22 bps, following April’s sharp spike

• Loss severities remain historically elevated, even with strong used car pricing

• LTV is now a stronger performance predictor than FICO, with below-85 LTV loans materially outperforming

• Charge-off differences across FICO bands have all but vanished, reflecting tighter LTV constraints on lower-score borrowers