Consumers With 780+ Scores Increase Sharply
Younger Generations Lead Growth in High-Credit Tier
The number of Americans with “super-prime” credit scores above 780 has continued to grow rapidly, even amid concerns about consumer debt and economic uncertainty. Younger consumers, particularly members of Generation Z and younger millennials, are driving much of the increase, intensifying competition among banks for premium customers.
According to TransUnion, more than 41% of consumers with active credit balances held super-prime credit ratings during the first quarter of this year. That figure has risen significantly from roughly 37% six years ago. During the same period, the number of super-prime consumers increased by approximately 15 million people.
Super-prime borrowers are generally defined as consumers with FICO score ratings of 780 or higher. They are considered among the lowest-risk borrowers and are highly sought after by banks because they are more likely to use premium credit cards and higher-value lending products while maintaining low delinquency rates.
Major financial institutions have increasingly highlighted their focus on high-credit customers during recent earnings reports.
Jane Fraser, chief executive of Citigroup, said during the company’s earnings call that the bank’s portfolio remains heavily weighted toward prime borrowers.
“Delinquencies and credit losses declined and remained well within expectations,” Fraser said. Citigroup noted that approximately 85% of its loan balances were tied to customers with credit scores above 660.
Analysts say pandemic-era stimulus payments and reduced consumer spending helped many Americans improve their credit profiles. Rising wages, along with gains in stock and housing markets, also contributed to the continued expansion of high-credit consumers.
Younger generations are also showing greater awareness of credit score management than previous generations, according to industry experts. Credit bureaus and card issuers report that many Gen Z consumers regularly monitor their scores and actively work to improve financial habits.
Stephen Squeri, chief executive of American Express, said younger consumers are adapting well to today’s financial environment.
“We actually view having a younger customer base today as a positive compared to a decade ago,” Squeri said.
American Express recently reported that a large share of new cardholders have been signing up for premium annual-fee credit cards. The company added that Gen Z and millennial customers are outperforming earlier generations on several credit-related metrics.
At the same time, economists warn that the nation’s financial divide continues to widen. While higher-income and high-credit consumers remain financially resilient, lower-credit borrowers are facing mounting debt pressures.
U.S. credit card debt has climbed to a record $1.3 trillion, while delinquency rates, auto loan defaults, and home foreclosures have also been rising.
