VantageScore: Consumer Credit Holds Steady; Delinquencies Ease and Mortgage Balances Come Down
(Illustration: Gustavo Rezende via Pixabay)
Consumer credit conditions remained largely stable in July, with delinquencies improving across the board, according to the latest CreditGauge report from VantageScore, San Francisco.
The average VantageScore 4.0 credit score edged down 0.4 points to 701, “settling back within the narrow 700-to-702 range that has held for much of the past year,” the report noted.
The dip in the average score came even as underlying delinquency trends improved. Early-stage delinquencies (30-59 days past due) fell to 0.89%, down from 1.05% in July 2025, with mid-stage delinquencies also easing year-over-year and late-stage delinquencies holding steady. The report noted that improvement was broad-based, showing up across every VantageScore credit tier, with the largest gains among Subprime and Nearprime borrowers. “Taken together, the data suggests that while the average score fluctuated modestly month to month, the underlying credit performance of consumers continued to hold up well.”
VantageScore said mortgage borrowers made headway, while auto and personal loans show pockets of pressure.
“Mortgage lending was a bright spot in July,” the report said. Delinquencies on home loans posted the strongest year-over-year improvement of any product, with early-stage delinquencies declining to 0.84% from 1.07% a year earlier, and mid- and late-stage delinquencies improving as well. “Borrowers continued to pay down their mortgage balances relative to loan amounts, bringing down the balance-to-loan ratio to 78.87%, a new one-year low and the lowest level on record, even as average balances rose modestly with home prices.”
But car and personal loans told a more mixed story, the report added. Balance-to-loan ratios on both products ticked up compared to a year ago, and early-stage delinquencies on personal loans rose to 0.90% from 0.85%, the only major product to see increases across all three delinquency stages. “Auto loan delinquencies were essentially flat year-over-year. While these shifts remain modest in scale, they suggest a subset of borrowers are leaning more heavily on installment credit as they navigate a higher-cost environment,” VantageScore said.
“July’s CreditGauge findings point to a consumer credit market that remains fundamentally healthy, with delinquencies improving across nearly every tier and product even as the average credit score dipped slightly,” VantageScore said. “At the same time, the continued rise in personal loan originations and balance-to-loan ratios in auto and personal lending are worth watching in the months ahead as a signal of how households are managing affordability pressures heading into the fall.”
VantageScore is a joint venture company owned by Equifax, Experian and TransUnion. CreditGauge is a monthly analysis highlighting the overall health of U.S. consumer credit.
