“The broad-based decline in consumer credit quality indicates that economic pressures are no longer concentrated among some VantageScore credit tiers and income levels,” Susan Fahy, EVP and chief digital officer at VantageScore, said.
“For example, the increase in auto loan and personal loan credit delinquencies likely reflects, in part, the compounding effects of sustained inflation, consistently elevated interest rates, higher borrowing costs, and an unsteady employment picture,” Fahy said.
Personal loan originations rise as consumers seek liquidity
The report also highlighted a shift in consumer borrowing patterns. Unsecured loan originations, including personal loans and credit cards, increased month-over-month—up 0.45% and 0.39% respectively—as more consumers refinanced debt with unsecured loans.
The average credit card balance climbed to $6,500, up $96 from a year earlier, with utilization rates also ticking up to 30.77%. These trends suggest that households are increasingly relying on revolving credit to manage persistent cost-of-living pressures.
A Zety Survival Debt Report found that more American workers are stuck in debt, with 37% carrying mortgages and 16% giving up on owning a home due to financial strain. Credit cards were the most common debt—71% of workers had balances—followed by mortgages, highlighting the pressure from housing costs. The survey also showed that just 27% were actively paying down debt, while 21% could only afford minimum payments and 9% struggled to pay even that.
