VantageScore: Consumer Credit Performance Remains Stable as Personal Loan Originations Climb
Consumer credit conditions remained resilient in May despite elevated interest rates and affordability pressures, according to VantageScore’s latest CreditGauge report. The report found that delinquency rates across all stages remained below pre-pandemic levels, while the average VantageScore 4.0 credit score held steady at 701. At the same time, unsecured lending continued to expand, with personal loan originations reaching their highest level in nine months.
Delinquency Rates Continue to Improve
One of the report’s strongest indicators of consumer credit health was continued improvement in delinquency performance.
Early-stage delinquencies, defined as accounts 30 to 59 days past due, declined to 0.89% in May from 1.01% a year earlier. Mid-stage delinquencies increased slightly month over month to 0.36%, while serious delinquencies of 90 to 119 days past due remained unchanged at 0.20%, still below pre-pandemic levels.
Across credit quality tiers, VantageScore reported year-over-year improvement in early-stage delinquencies:
- Prime borrowers improved from 0.20% to 0.16%.
- Nearprime borrowers improved from 1.87% to 1.58%.
- Subprime borrowers improved from 11.0% to 9.8%.
- Superprime borrowers maintained exceptionally low delinquency rates, declining from 0.0040% to 0.0020%.
Late-stage delinquency rates also remained stable across nearly every credit tier, suggesting that financial stress has not translated into widespread deterioration among consumers.
Credit Scores Hold Steady
The average VantageScore 4.0 credit score remained at 701 during May, essentially unchanged from the prior month.
According to VantageScore, approximately 63.5% of consumers remain within the Prime or Superprime credit tiers. The report noted modest growth in Nearprime and Subprime populations, indicating that affordability pressures continue to influence some consumers even as overall credit performance remains healthy.
Personal Loan Originations Continue to Grow
The most notable lending trend in May was continued strength in unsecured lending.
Personal loan originations increased to 3.41% of consumers opening new accounts, marking the highest level since October 2025. Credit card and mortgage originations also increased year over year, while auto loan originations declined.
VantageScore attributed weaker auto lending in part to vehicle purchases that were accelerated during 2025 ahead of anticipated tariff impacts.
Generation-level data showed Gen Z posting the largest year-over-year increase in personal loan originations, rising 17% compared with May 2025.
Consumers Continue Managing Debt Despite Higher Costs
Average balances increased modestly across most lending products during May, but utilization metrics suggested consumers have generally avoided overextending themselves.
Highlights included:
- Average credit card balances increased to $6,390, while utilization remained below year-ago levels at 29.85%.
- Average mortgage balances increased to $274,300, while mortgage balance-to-loan ratios edged slightly lower.
- Personal loan balances remained relatively stable at approximately $17,100 despite increased utilization.
- Overall balance-to-loan ratios remained below pre-pandemic levels, indicating available credit continues to expand faster than outstanding debt.
VantageScore said these trends suggest consumers continue to manage borrowing responsibly despite elevated borrowing costs and ongoing household budget pressures.
Mortgage Delinquencies Show Mixed Trends
Mortgage performance presented one of the report’s more nuanced findings.
Early-stage mortgage delinquencies improved significantly year over year, indicating fewer homeowners are newly falling behind on payments. However, mid-stage and late-stage mortgage delinquencies increased modestly, suggesting a smaller group of already-distressed borrowers continues to experience repayment challenges.
