September 2026 Consumer Unsecured Performance: Charge-Offs Approach Historic Lows

dv01's latest Consumer Unsecured Performance Report shows continued strength in September, with 30+ impairments unchanged MoM despite typically weaker seasonal trends. Impairment net charge-offs fell to 0.67%, extending a period of sustained YoY improvement.

What the Data Shows

• FICO matters less for Middle Grade loans: Charge-off rates have been nearly identical across FICO ranges since 2025, despite differences in loan pricing.
• Loan grade is a stronger indicator of credit risk: Middle Grade defaults run 3 CDR higher than Top Grades for borrowers with 720+ FICO.
• Charge-offs approach historic lows: CDR fell to 6.2 in September, just 10 bps above September 2018 levels.
• Newer vintages show renewed weakness: Impairments are rising in both 2024-Q4 and 2025-Q2 loans, with 2025-Q2 now showing higher rates than 2024-Q4 at comparable loan ages.

What We’re Watching

• How will record origination volumes entering performance metrics affect credit performance heading into 2027?
• Does persistent weakness in Cure and Made Payment rates signal a slowdown in future CDR improvements?
• With charge-offs approaching their best levels outside of 2021, how much further can CDR decline?