A fresh analysis points to surprising trouble spots in US lending
Late-stage credit delinquencies climbed across all credit tiers in July, with the sharpest increases appearing among borrowers traditionally considered the least risky, according to the latest CreditGauge report released Monday by VantageScore.
The analysis found that delinquencies more than 90 days overdue rose 109% year over year in the Superprime segment and 47% in the Prime segment. The average VantageScore 4.0 slipped by one point to 701, reflecting a modest decline in overall consumer creditworthiness.
“Consumers in the highest VantageScore credit tiers are showing increased signs of credit stress on a year-over-year basis,” said Susan Fahy, executive vice president and chief digital officer at VantageScore. She added that the divergence between secured and unsecured lending is becoming more pronounced.
Balances for mortgages and auto loans rose in July, while new credit originations declined. “Sustained inflation for car and house prices is driving higher balances in these credit categories,” Fahy said.
The report showed that mortgage and auto loan delinquencies recorded the steepest increases in the early-stage category, with past-due accounts of 30–59 days up 0.11 and 0.05 percentage points, respectively. At the same time, balances in both categories expanded month over month.
Auto loan originations fell to 1.42% in July after reaching a peak of 1.76% in April, while mortgage originations remained steady from June but edged 0.04% higher than in July 2024. VantageScore said the slowdown in originations likely reflects both reduced consumer demand and tighter lending standards.
The Subprime segment of US consumers—those most vulnerable to repayment difficulties—expanded to 18.7% in July from 18.1% two years earlier. The Prime tier, meanwhile, contracted by 1.4% over the same period.
VantageScore noted that these shifts highlight growing repayment pressures across a broader swath of consumers, particularly as secured lending balances climb.
VantageScore said its 4.0 scoring model now covers 33 million more consumers than traditional models, with more than 3,700 institutions—including the 10 largest US banks—using its scores.
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