Delinquency is one of the clearest indicators of how healthy a loan portfolio is, but it is also one of the easiest numbers to misunderstand. A rate that looks high for one type of lender may be perfectly normal for another. Economic shifts, borrower profiles, and the mix of loan types can all change what “normal” looks like.
If you are trying to understand how your portfolio compares to industry trends, here is a straightforward way to think about delinquency and the ranges that are commonly seen today.
Total credit union delinquency tends to stay low
Across the country, credit unions usually show a combined delinquency rate that stays under one percent. This number reflects all loan types together, including mortgages, autos, credit cards, and personal loans.
It also reflects the reality that credit unions often have strong member relationships, tighter underwriting, and portfolios that tilt toward prime borrowers.
If your overall delinquency sits near this range, you are generally aligned with national trends.
Individual loan categories behave differently
While the combined number stays low, each loan type has its own pattern.
Here is how lenders usually see it:
Auto loans
Delinquency can rise when used-car values soften or when borrowers face higher repair or insurance costs. Prime auto portfolios tend to remain steady, while risk-tier or subprime segments show noticeably higher delinquency.
Credit cards
Credit-card delinquency has risen over the past few years and remains higher than pre-pandemic levels. These accounts are unsecured and easier to fall behind on, so delinquency is naturally higher than on secured products.
Unsecured personal loans
These loans often show the widest range. They serve many different borrower types, which makes “normal” depend heavily on your underwriting strategy.
Mortgages
Mortgage delinquency typically stays very low unless there is a major economic disruption.
This variation is why two lenders with the same overall delinquency can have very different loan-level stories.
Economic conditions influence every portfolio
Consumer stress, inflation, job stability, and interest rates can all affect delinquency. When living costs rise faster than income, lenders usually see:
- Slower payments on credit cards
- Higher late payments on auto loans with rising insurance or repair costs
- Higher volatility in unsecured personal loans
- Little movement in mortgages unless job loss becomes widespread
Understanding these outside pressures helps clarify whether your delinquency trend is a portfolio issue or part of a broader pattern.
“Normal” depends on who you serve
No two lenders have the same borrower profile. A credit union serving long-tenured prime members will have a very different baseline than a lender focused on deep-tier auto loans.
A healthier way to define “normal” is to look at:
- Your borrower mix
- Your loan types
- Your average loan age
- Your economic region
- Your current underwriting standards
A portfolio can be performing exactly as expected even if the headline delinquency number is higher or lower than a national average.
A simple framework for evaluating your delinquency
Instead of focusing on a single number, credit unions and lenders get a clearer picture by asking:
- Is delinquency rising faster in one loan category than others?
- Are early-stage delinquencies feeding into later stages or stabilizing?
- Is the trend driven by external economic pressure or portfolio-specific factors?
- How does today compare with your own past performance ?
- Are certain borrower tiers showing most of the movement ?
This kind of review tells a more accurate story and gives you better insight into your risk.
When delinquency becomes a concern
A portfolio becomes vulnerable when:
- Early-stage delinquency increases for several consecutive quarters
- Roll rates from 30 to 60 to 90 days begin to accelerate
- Member hardship requests rise in a short period
- Charge-offs move up at the same time as delinquency
- One loan category begins to pull overall performance upward
These signals help lenders act early, before the trend becomes costly.
Final thoughts
There is no single delinquency rate that fits every lender. What matters is how your portfolio behaves over time and how well it matches your risk strategy.
Credit unions and lenders who regularly review trends by loan category, borrower tier, and economic conditions are the ones who stay ahead of emerging issues and protect their bottom line.
About Optio Solutions
Optio Solutions is a nationally licensed accounts receivable management firm. We help businesses recover revenue while protecting brand reputation and customer relationships. Our methods combine professionalism, empathy, and compliance because successful collections and respectful treatment should go hand in hand.
