July 2026 Consumer Unsecured Performance: Charge-Offs Fall as 2025 Vintages Improve

dv01's latest Consumer Unsecured Performance Report shows broad improvement in July, with every major metric outperforming seasonal trends. The 3–6 month cohort continues to show the largest relative improvement, with impairments now below July 2025 levels and only 10 bps above July 2024.

What the Data Shows

• Charge-offs continue to move lower: CDR fell 0.6 to 6.3 in July, reversing June's increase and improving at nearly two times the seasonal pace. Charge-offs are now 0.4 CDR below pre-COVID levels.
• Credit performance improves in 2025 vintages: After impairments initially rose at the fastest pace since 2022, 2025-Q1 and Q2 are now below 2024-Q4 on an age-adjusted basis.
• Improving credit performance is helping offset lower yields: The 2025-Q1 ROI gap to 2024-Q4 and 2023-H2 has narrowed from 40 bps a year ago to less than 20 bps today despite lower GWACs, with Top Grades driving most of the convergence.

What We’re Watching

• Can Consumer Unsecured charge-offs re-test their 2018 lows, or even approach 2021 levels?
• How much of the recent outperformance in the 2025 vintages will persist through the second half of the year?
• With record originations in June and July indicating Consumer Unsecured is taking market share from credit cards, what could that mean for future performance?