NY Fed Data Shows Stable Credit Demand

A recent New York Fed study found that delinquency expectations have softened and credit applications are at a three-year high.

The Federal Reserve Bank of New York released its latest Survey of Consumer Expectations on March 9, revealing that U.S. households continue to seek credit at steady rates, with robust application rates and declining delinquency indicators.

Debt delinquency expectations — the probability of not being able to make minimum debt payments over the next three months — sat at 11.6% in February, its lowest level since February 2024.

According to the report, respondents said it’s harder to obtain credit than a year ago, but their expectations for future credit availability have improved.

Credit application rates for households with credit scores below 680 fell to 46.1% in February, from 51.7% in October.

The rejection rate for credit applications also shifted notably. The overall rejection rate for all credit types stood at 15.9%, the lowest level since June 2021.

Consumer debt balances have continued their upward trajectory. Earlier New York Fed data from late 2025 showed that total household debt reached $18.59 trillion, driven primarily by mortgages and credit cards. While mortgage delinquency remains low by historical standards, credit card and auto loan performance haves become a focal point for economic analysts.

The SCE survey also tracks “discouraged borrowers” — individuals who did not apply for credit because they expected to be rejected. This figure remained relatively stable at 8.3% in February, roughly the same as a year ago.

“The share of respondents reporting a lender-initiated closing of an account in the past twelve months rose to 9.1 percent, a new series high,” according to the report.

For the accounts receivable management industry, these indicators provide a window into current payment capacity. The relative stability in credit demand may signal that a segment of the consumer base is finding a firmer financial footing.

The New York Fed report also highlighted that consumers’ expectations regarding their future financial situation have become more cautious. The perceived probability of a $2,000 emergency expense occurring in the next month rose to 32.8%, while confidence in being able to pay for it dropped to 63.3%.

The data suggests that while some consumers have the means to pay, their fear of future volatility makes them selective about which obligations they will prioritize.