Consumer Credit Remains Stable as Borrowers Adjust to Higher Interest Rates

A new VantageScore report shows delinquencies falling across credit tiers while unsecured lending, led by personal loans, continues to grow.

Consumer credit performance held steady in May, even as borrowers continued to face higher interest rates and affordability challenges, according to VantageScore’s May 2026 CreditGauge report.

The average VantageScore 4.0 credit score held steady at 701 in May 2026, pointing to continued stability in overall consumer credit health. VantageScore also reported that delinquency rates across all delinquency stages remained below pre-pandemic levels.

“While consumer sentiment has softened in recent months, the underlying credit data tells a more stable story,” said Atif Mirza, executive vice president and chief digital and insights officer at VantageScore, in a company press release.

Year over year, early-stage delinquencies (30-59 days past due) improved across all credit tiers in May:

• Prime borrower delinquencies fell from 0.20% to 0.16%.
• Near-prime borrower delinquencies fell from 1.87% to 1.58%.
• Subprime borrower delinquencies dropped from 11% to 9.8%.
• Super prime delinquencies remained very low, declining from 0.0040% a year earlier to 0.0020%.

The data reflects broad stabilization in consumer credit performance, even as consumers continue to face higher borrowing costs, student loan repayment obligations and cost-of-living pressures, according to VantageScore’s report.

The report also shows that new credit activity picked up, with originations remaining above May 2025 levels across most products. Unsecured lending led the growth, particularly personal loans, which reached a nine-month high. Personal loan originations increased from 2.88% to 3.41% since October 2025, which VantageScore identified as an area to watch in the months ahead.

“Coupled with a rebound in new credit originations, these credit trends point to a credit market that remains healthy and accessible,” Mirza said.

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