Equifax Market Pulse Index Signals First Uptick for Lower Credit Tiers Since 2024—Gen Z Outpaces Millennials in Financial Progress

Lower Credit Tiers See First Positive Shift in Over a Year

Equifax’s third quarter 2025 Market Pulse Index has drawn attention for an early but notable sign: U.S. consumers with VantageScore 4.0 credit scores below 580 saw their Index value rise by over 0.40%—almost double the rate for the highest credit tier. This marks the first quarter since March 2024 that lower credit tier consumers posted an increase, signaling a potential turning point for some of the most financially vulnerable Americans.

The Market Pulse Index, an aggregate score ranging from 1 to 100, reflects consumer economic well-being by synthesizing data on credit, debt, income, and assets. For Q3 2025, the Index reached 61.6—up 0.35% from last quarter and 0.14% year-over-year. While the economic ‘K-shape’—a divide where higher-income households pull away from those with fewer resources—is still widening, this quarter shows the gap isn’t expanding as rapidly as it has in years past.

Stabilizing Credit and Improved Debt Metrics Drive Gains

According to Equifax, the positive movement for those with lower credit scores is largely driven by improving debt-to-income ratios and household affluence, paired with a 60-plus day delinquency rate that, while elevated, has stabilized. “This suggests early signs of credit scores stabilizing among the most vulnerable consumers, though there’s still room for caution,” says Emmaline Aliff, Equifax’s Advisory Leader.

The development is significant considering the headwinds lower-income households have faced post-pandemic. It could indicate the start of a more promising trend, provided other financial pressures—such as inflation and wealth inequality—remain in check.

Gen Z Surpasses Millennials But Shows Marked Variability

For the first time, Gen Z’s average Market Pulse Index value (59.04) has overtaken that of Millennials (58.82). Gen Z improved by 0.71% quarter-over-quarter and 0.34% year-over-year, compared to Millennials’ 0.17% and –0.04%, respectively. But there’s a twist: the spread between the highest and lowest scores in the Gen Z group is much wider than in older cohorts. Some Gen Z individuals are adapting rapidly—as they enter the workforce and access generational support—while others remain on less sure footing.

The data suggests Gen Z’s financial momentum presents an opportunity for lenders and retailers—the next wave of borrowers may be both ambitious and variable in stability, which means risk management will be key.

Older Generations Remain Most Financially Stable

Baby Boomers and Traditionalists (Silent Generation) posted the highest Index levels (64.5 and 65.7, respectively). The Silent Generation also showed the strongest quarter-over-quarter (+1.30%) and year-over-year (+0.99%) gains—likely a testament to long-term savings and accumulated assets. In contrast, Gen X saw moderate but steady improvement, up 0.31% quarter-over-quarter and 0.12% from a year ago.

Takeaway: Early Signs of Stabilization Offer Room for Cautious Optimism

For investors and analysts, the Market Pulse Index offers a nuanced lens into American consumer health. The stabilization among lower credit tiers and Gen Z’s rising profile provide signs of progress, even if gaps remain. Lenders and retailers may find opportunities in engaging Gen Z—but variability and risk management remain significant considerations.

With economic headwinds still in play, continued improvement in debt-to-income and delinquency rates will be essential for sustaining these early gains. The Market Pulse Index, backed by Equifax’s AI-powered approach, will remain a key metric to watch heading into 2026.

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