5 Years Of Market Pulse Insights: How Has Consumer Credit Changed Since 2020?
Highlights:
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The consumer credit market has transitioned into a "K-shaped reality," where overall stable performance masks rising financial stress in lower-credit segments, necessitating a segment-specific risk approach.
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Lenders must move beyond single metrics and adopt a "whole consumer" view by utilizing advanced modeling, alternative data, and comprehensive tools like the Market Pulse Index for smarter segmentation and stronger portfolio management.
Market Pulse, the premier thought leadership platform from Equifax, completed its fifth year offering unique, data-driven insights to decision makers across a wide range of industries. In recognition of this milestone, we are, through a series of blogs, taking a look at how some of these industries have changed over the past five years. Each entry will compare three moments in time over this time period: five years ago, two and a half years ago, and today.
The first blog focused on the auto industry, and for this second entry, we’ll examine how consumer credit, which was rocked by the pandemic-era shift that hit the market, has evolved over the last five years and how this series of changes have reshaped lenders’ views on risk, resilience, and opportunity.
Looking back at three key moments — five years ago, two and a half years ago, and today — one theme stands out: Each phase revealed something new about the true financial health of consumers. And each phase influenced how lenders had to adapt next.
2020: When Risk Was Hidden
In 2020, the biggest challenge in consumer credit wasn’t rising delinquencies; it was missing signals.
As pandemic-induced lockdowns spread, consumer spending dropped sharply. Revolving debt fell by more than $100 billion, and bankcard utilization hit historic lows. On paper, consumers looked healthier than ever. But that picture was incomplete.
The CARES Act played a major role.¹ Payment relief programs required lenders to report many accounts as “current,” even if consumers were struggling behind the scenes. These accommodations were critical for helping households survive the crisis, but they also created blind spots in credit files. Traditional risk indicators were temporarily muted.
This shift pushed lenders to focus on proactive portfolio management.² Instead of reacting to delinquency, they had to anticipate what might happen after accommodations ended. Advanced modeling and newer scoring approaches became more important tools for predicting future behavior, not just past performance.
Mid-2023: Preparing for Impact
By mid-2023, the conversation shifted. Stimulus savings were fading, inflation was squeezing household budgets, and lenders were bracing for a possible downturn.³
Consumer spending remained strong, but cracks were starting to show. Non-mortgage delinquencies began rising toward pre-pandemic levels. The question wasn’t if stress would show up. It was where and how fast.
During this period, many lenders tightened credit and focused on staying prepared for any major economic downturn. Risk strategies became more defensive, with greater attention on early-stage delinquency and portfolio segmentation. Fintechs and traditional lenders alike looked for ways to balance growth with caution in an uncertain environment.
Today: A K-Shaped Reality
Fast forward to today, and the consumer credit market is defined by a widening gap, known as the K-shaped economy.
On one side of the “K,” higher-credit consumers are still spending and largely staying current.⁴ On the other side, lower-credit segments are under growing pressure to make ends meet. By mid-2025, subprime borrowers held more than 22% of total bankcard debt — a sharp increase from pandemic lows.
This K-shaped split means averages can be misleading. Overall performance may look stable, but that stability masks rising stress in specific segments. For lenders, this reality makes a single view of consumer health not just insufficient but also risky.
How Each Phase Shaped the Next
Each stage of the last five years set the tone for what followed. The blind spots of 2020 exposed the limits of traditional credit data. The rising stress of 2023 highlighted the need for better segmentation. And today’s divide confirms that consumer health can’t be measured with one metric or one score.
The lesson is clear: Resilience comes from seeing the full picture — both at scale and at the individual level.
Actionable Insight: Look at the Whole Consumer
To navigate today’s uneven landscape, lenders need tools that go beyond surface-level indicators.
The Market Pulse Index offers a broader view by measuring credit, debt, income, capacity, and assets across the population. It helps identify where stress is building and where opportunity remains. When paired with alternative data at the individual level, lenders can make smarter, more confident decisions.
This combined approach supports responsible growth, sharper segmentation, and stronger portfolios, especially in an economy where the gap between consumers continues to widen.
Five years after the start of Market Pulse, consumer credit isn’t just about managing risk. It’s about understanding which consumers are changing, how they’re changing, and why that matters now more than ever.
Discover the latest Market Pulse Index Report.
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