Odd Lots Why Americans Are Falling Behind on Auto Loans At Their Highest Level Ever
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Dec 22, 2025 
Rikard Bandebo, Chief Economist at VantageScore, delves into the alarming rise of auto loan delinquencies, which have reached historic highs. He explains how surging prices, rising interest rates, and increasing insurance costs contribute to this trend. Bandebo discusses the K-shaped economy and its effects on different income cohorts, highlighting why higher-income delinquencies are also rising. Additionally, he examines the impact of resumed student loan payments and the critical role of cash-flow data in assessing consumer credit health.
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Scoring More People With Trended Data
- VantageScore uses trended time-series and alternative data to score tens of millions more people.
- Bandebo says segmenting consumers and applying different models boosts predictive accuracy and access.
Scores Reflect Relative, Time-Varying Risk
- Credit scores are relative measures of risk that change with economic conditions.
- Bandebo stresses lenders must adjust underwriting to reflect shifting macro risk even if individual scores stay constant.
Adopt Newer, Proven Mortgage Scores
- Lenders should consider adopting more predictive scoring models for mortgages to expand access safely.
- Bandebo notes FHFA's update to allow VantageScore 4 can increase scorable borrowers and reduce RMBS systemic risk.