May 2026 Consumer Unsecured Performance: Metrics Keep Improving Despite Tougher Comps

dv01's latest Consumer Unsecured Performance Report shows another month of outperformance on a seasonally adjusted basis, extending the strongest sustained performance stretch in the sector's history. The headline metrics remain strong, but cure and Made Payment behavior remain areas to watch.

What the Data Says:

• Record charge-off outperformance: Impairment Net Charge-offs posted the best May on record, rising just 2 bps to 0.59%. Charge-offs fell to 6.4 CDR and are now 40 bps below May 2019 levels—the widest gap to pre-COVID since 2022.
  
• Early signs of a turning point for impairments: 2024 vintages remain in line with or above 2023-H2 trendlines, but impairment growth among 2025 Q-1 and especially 2025 Q-2 has slowed at a pace exceeding historical seasonal trends.
  
• GWAC compression extends beyond Consumer Unsecured: FFIEC data shows bank credit card interest earned has fallen 40 bps from its early 2025 peak, reflecting a broader repricing of credit at the top of the spectrum.

What We're Watching:

• Does the weakness in cure and Made Payment behavior indicate a shift away from outperformance or just the reflection of greater difficulty among troubled borrowers?
  
• With performance improvements not extending to the problematic 2024-Q4 and later vintages, what is the "new normal" for expected performance in consumer unsecured as it will clearly surpass pre-COVID comps?
  
• Does the recent performance improvement allow for even more GWAC compression at the top of the credit funnel?