If you’re concerned about the U.S. economy, you have reason to be. There are plenty of red flags that suggest Americans are struggling. From Dollar Tree seeing a rise in affluent customers to economists warning that tariffs present a major obstacle to growth, there are signs everywhere that trouble is brewing.
Now, the latest warning comes from one of the leading credit scoring agencies in the United States: VantageScore.
VantageScore is used by over 3,700 institutions, including top U.S. banks, to assess Americans’ creditworthiness. VantageScore also scores 33 million more people than traditional credit scoring models.
The agency obviously collects a lot of data on U.S. consumers to do that. Now, this data shows there’s a big problem brewing.
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VantageScore sounds the alarm on Americans’ financial status
VantageScore’s harsh warning originates from the July 2025 CreditGauge data, which shows that a lot of people may be getting in over their heads in debt. This is a bad sign for the economy and for the country as a whole. That’s especially true given VantageScore’s insight into who is struggling.
VantageScore Sees troubling trends
- Late-stage delinquencies increased for people in all different credit-score tiers.
- There’s a 109% increase year-over-year in credit delinquencies among Superprime borrowers.
- There’s a 47% increase year-over-year in delinquencies among Prime borrowers.
- The average VantageScore 4.0 credit score declined by one point, as the average consumer became less creditworthy.
- Delinquencies in mortgage and auto loans were up the most year-over-year.
- Auto loan balances and mortgage loan balances were both up on a month-over-month basis.
Essentially, this means that some of the best and most qualified borrowers in the United States are now seeing an uptick in delinquencies.
This includes delinquencies where they are 90 or more days late, which is getting deep into collections territory.
Consumers with higher credit scores are struggling
An overall uptick in delinquencies is worrisome under any circumstances, but there’s extra reason for concern here because people with good or excellent credit are still showing payment problems.
Usually, by definition, this is not a group that tends to struggle, or they wouldn’t have such great credit in the first place.
Related: Dollar Tree’s new customers spell bad news for all of us
A big uptick in mortgage delinquencies is also a bad sign for the economy as a whole. After all, most people are a whole lot more willing to miss a credit card payment than they are willing to miss a mortgage payment when their house is at risk.
The fact that people are falling behind on mortgages suggests many are truly out of options.
VantageScore chief economist has a blunt warning about economic concerns
VantageScore Chief Strategist and Chief Economist Rikard Bandebo offered some blunt warnings for consumers in light of the new data.
“In relative terms, the sharpest increase in delinquencies was seen in Superprime and Prime customers who are typically considered the most financially secure,” Bandebo said.
“There has also been an uptick in late-stage delinquencies in Auto Loans and Mortgages, as consumers grapple with budget strains. Defaults on secured loans, such as mortgages, typically happen only when the pressure on finances is too much for the consumer to manage.”
If even well-qualified borrowers are struggling and if Americans are reaching a point where they can’t even afford their homes, this obviously shows both a current problem with the economy as well as a strong future risk of recession, since people who are at their breaking point aren’t doing much shopping.
Obviously, consumers need to be concerned about these trends, and if they are in a position to do so, should consider shoring up their emergency savings for an uncertain future.
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