The exchange for the debt economy
VantageScore’s latest CreditGauge data shows the subprime segment is growing, but only modestly: the share of consumers in the VantageScore subprime tier rose from 18.5% in December 2023 to 19.0% in December 2025, a 0.5 percentage‑point increase over two years.How much is subprime growing?
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Subprime share of consumers:
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December 2023: 18.5%.
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December 2025: 19.0%.
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Change: +0.5 percentage points (about a 2.7% relative increase in the subprime pool).
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Near‑prime (just above subprime) also increased:
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17.6% to 17.9% over the same period.
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Prime borrowers shrank by 1.1 percentage points, indicating a gradual migration down the credit tiers.
Quick view of tier shifts
| VantageScore tier | Dec 2023 share | Dec 2025 share | Direction |
|---|---|---|---|
| Subprime | 18.5% | 19.0% | Growing |
| Near‑prime | 17.6% | 17.9% | Growing |
| Prime | — | Down 1.1 pts over period | Shrinking |
What VantageScore says this means
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VantageScore links this shift to ongoing affordability pressures (higher borrowing costs and prices), which are pushing more consumers into lower credit tiers.
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They also report rising delinquencies across early, mid‑ and late‑stage buckets, especially among subprime borrowers, signaling growing repayment strain.
VantageScore attributes the growth in subprime and decline in prime mainly to rising affordability pressures, elevated interest rates, and resulting increases in delinquencies, which are nudging more consumers into lower credit tiers over time.
Key drivers VantageScore highlights
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Affordability pressures: VantageScore says the migration from prime to subprime and near‑prime “reflect[s] pressure from ongoing affordability constraints,” meaning everyday costs and debt payments are taking a bigger bite out of household budgets.
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Elevated interest rates and prices: Higher mortgage and auto loan delinquencies are described as reflecting “the effects of elevated interest rates and prices in today’s housing and auto markets,” making it harder for many borrowers to keep up.
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Rising delinquencies across stages: Overall delinquency rates have ticked higher at early, mid, and especially late‑stage levels, signaling repayment strain; this strain tends to lower scores and push more people into subprime.
How this leads to more subprime and less prime
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Score drift downward: VantageScore reports the average VantageScore 4.0 fell to 700 in December 2025, down one point month‑over‑month and two points year‑over‑year, indicating modest broad softening in consumer credit profiles.
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Tier migration pattern: From December 2023 to December 2025, the subprime share rose from 18.5% to 19.0% and near‑prime from 17.6% to 17.9%, while the prime tier shrank by 1.1 percentage points, which VantageScore explicitly characterizes as a “gradual migration of consumers to lower credit tiers.”
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Uneven impact (K‑shaped trends): VantageScore’s CEO describes a “tale of two cities,” where affluent, very creditworthy borrowers continue to spend and borrow comfortably while “everyday Americans are feeling much more challenged,” with more of them becoming marginal or risky, reinforcing growth in subprime relative to prime.
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The exchange for the debt economy