American’s Auto Loan Credit Scores Plummet 8 Points in Just 3 Months, And Things Are Starting To Get Slippery
The median credit score for auto loan borrowers dropped 8 points to 716 in Q4 2025, indicating lenders are approving riskier borrowers. Auto loan balances grew $12 billion to $1.66 trillion, with delinquency rates rising to 4.8%.
The median credit score for auto loan borrowers fell 8 points to 716 in Q4 2025, according to the New York Fed's Household Debt and Credit report. Auto loan balances grew $12 billion to $1.66 trillion, driven by $181 billion in new originations. Lenders loosened their standards, approving borrowers with less creditworthiness, as interest rate cuts squeezed their margins. Delinquency rates rose to 4.8%, up 0.3 percentage points from the prior quarter. The financial buffer for households has thinned, leaving them with less margin for error. Consumer sentiment is pessimistic, and debt continues to pile up.
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