Consumer credit steady in July as delinquencies ease

VantageScore’s July CreditGauge shows U.S. consumer credit remained stable, with delinquencies improving across most products and credit card utilization staying below year-ago levels. Mortgage balances fell relative to loan amounts, while personal loan borrowing and some installment-credit pressure remained areas to watch.

Why it matters: - July data points to a consumer credit market that is still holding up despite higher living costs. - Improving delinquencies across most tiers and products suggest borrowers are coping better than many expected. - Mortgage paydowns and restrained card usage indicate consumers are still managing balance growth carefully.

What happened: - VantageScore’s July 2026 CreditGauge showed the average VantageScore 4.0 credit score slipped 0.4 points to 701. - The score stayed in the narrow 700-to-702 range that has held for much of the past year. - Early-stage delinquencies fell to 0.89% from 1.05% in July 2025. - Mid-stage delinquencies also eased year over year, while late-stage delinquencies held steady. - Improvement showed up across every VantageScore credit tier, with the biggest gains in Subprime and Nearprime.

The details: - Mortgage delinquencies posted the strongest year-over-year improvement of any major product. - Early-stage mortgage delinquencies dropped to 0.84% from 1.07% a year earlier. - Mid- and late-stage mortgage delinquencies also improved. - The mortgage balance-to-loan ratio fell to 78.87%, a one-year low and the lowest level on record. - Average mortgage balances rose modestly as home prices increased. - Auto and personal loans showed mixed results. - Balance-to-loan ratios on auto and personal loans rose from a year earlier. - Early-stage personal loan delinquencies increased to 0.90% from 0.85%. - Personal loans were the only major product to post increases across all three delinquency stages. - Auto loan delinquencies were essentially flat year over year. - Credit card balances rose to $6.45K in July, up less than 1% from a year earlier. - Credit card utilization held at 30.15%, 40 basis points below July 2025. - New credit demand increased year over year across every major product. - Personal loan originations rose 17% year over year, the strongest growth among non-mortgage products. - Millennials and Gen Z drove much of the personal-loan increase. - Credit card and mortgage originations also rose. - Auto loan originations were largely unchanged.

Between the lines: - The slightly lower average credit score appears to reflect normal month-to-month movement more than worsening consumer stress. - The data suggest households are still using credit cautiously, especially on revolving balances. - Rising personal-loan demand and higher balance-to-loan ratios in auto and personal lending may signal affordability pressure for a subset of borrowers. - VantageScore’s read on consumer credit is based on its own analysis and does not necessarily reflect the views of Equifax, Experian or TransUnion.

What's next: - Borrowing trends in personal loans, auto loans and mortgage affordability will be worth watching heading into fall. - Continued improvement in delinquencies would reinforce the view that consumer credit health remains intact. - Further pressure in installment lending could show up if higher living costs persist.

The bottom line: - Consumer credit looks steady, but not uniformly strong: mortgages improved, card usage stayed contained and personal loans showed the clearest signs of strain and demand.