August 2026 Consumer Unsecured Performance: Charge-Offs Hit a Record August as Newer Loans Hold Steady

dv01's latest Consumer Unsecured Performance Report shows impairments rising in August, led by loans aged 3-6 months. Impairments in this group rose 56 bps MoM, but the increase was highly concentrated. Excluding outlier activity, it was 5 bps, which fits the steady improvement in newer loans seen throughout 2026. Meanwhile, charge-offs set their best August on record.

What the Data Shows

• Newer loans drive the rise in impairments: Impairments on loans aged 3–6 months rose 56 bps MoM, though the increase was just 5 bps excluding outlier activity.
• Charge-offs post their best August on record: CDR fell to 6.3, compared with a typical August rise of 0.4, and is now 70 bps below August 2019.
• Credit cards close in on pre-COVID levels: FFIEC data shows credit card delinquencies and charge-offs down year over year, with the gap to pre-COVID levels more than halved, while balances hit a record of more than $1.2 trillion.
• Grade matters more than FICO: Lower-FICO loans still earn record ROI premiums, but 2025 vintages have already shifted in favor of Top Grade loans.

What We’re Watching

• The last three months had record originations. How will those vintages perform, given they'll shape aggregate results for years
• Will late 2025 and early 2026 vintages shift further toward Top Grade performance and ROI?
• With newer loans improving (setting aside the August spike), can charge-offs set new historical lows?