Rising Loan Delinquencies Signal Broader Financial Stress as Credit Scores Dip

Americans are falling behind on debt payments at an accelerating pace, with late-stage delinquencies surging across all credit tiers. The average VantageScore dropped to 701 in July—the first decline since February—as inflationary pressures and high interest rates strain household budgets.

Superprime borrowers (781-850 scores) saw 90-day delinquencies jump 109% year-over-year, while prime-tier delinquencies ROSE 48%. Even early-stage payment struggles are mounting, suggesting deteriorating financial resilience before accounts reach critical status.

This credit deterioration coincides with growing mortgage and auto loan balances, creating a feedback loop of debt stress. The data reveals how persistent inflation and elevated borrowing costs are eroding financial stability—a trend that could eventually drive more investors toward decentralized finance alternatives as traditional credit markets tighten.