Lenders Are Saying Yes to More Borrowers With Scores of 660 or Lower. Here's the Catch in TransUnion's New Report

Credit is getting easier to find if your score isn't great. A new report shows it often comes with smaller limits and rates set for the risk, and that more individual borrowers are falling behind.

Is it getting easier to get credit with a lower score?

Yes, by TransUnion's numbers. In its latest report, 42.3% of new credit cards and 69.0% of new personal loans went to below-prime borrowers, up from 40.6% and 66.1% a year earlier. Below prime means a VantageScore 4.0 of 660 or lower.

TransUnion released its Q3 2026 Credit Industry Insights Report on Thursday morning, Nov. 5. Total consumer balances grew about 3% from a year earlier, and 263 million consumers now have active credit. New lending figures in the report run one quarter behind to allow for reporting lag, so the origination numbers below describe the second quarter.

Lenders opened a record 22.4 million credit cards in that quarter, up 9.5% from a year earlier and the seventh straight quarter of growth. Subprime originations rose 16.5% and near-prime rose 11.6%. Personal loan originations rose even faster, up 22.7% to a record 8.41 million, with fintech lenders making 49.4% of them.

What's the catch for borrowers?

The catch is in how lenders are making these approvals work. "Lenders have limited exposure and improved portfolio performance through the use of strategies such as lower credit lines, smaller loan amounts and interest rate adjustments for consumers in below prime risk tiers," said Jason Laky, TransUnion's head of financial services.

In plain English, a yes may not look like the offer a borrower with a high score gets. The limit may be lower, the loan may be smaller, and the rate may be set to reflect the risk. The report doesn't give average rates by tier, so we can't say how much more those borrowers pay. Josh Turnbull, who leads TransUnion's consumer lending business, said personal loan growth "is being fueled by a larger number of smaller loans, particularly among subprime consumers."

A separate Federal Reserve survey we covered this week found banks tightening card limits and reducing subprime approvals. The two reports aren't measuring the same thing. The Fed asks banks about their standards, while TransUnion counts accounts actually opened across lenders, including the fintechs.

Why are delinquency numbers moving in opposite directions?

The report's most useful detail may be that two delinquency measures disagree. On credit cards, the share of balances 90 or more days past due fell to 1.99% from 2.05%, the lowest since the third quarter of 2023. But the share of borrowers that far behind rose to 2.50% from 2.37%. Personal loans show a bigger gap: 1.95% of balances were at least 60 days late, versus 2.01% a year ago, while borrower-level delinquency jumped to 4.12% from 3.52%.

Here's a simple way to see how that can happen. Imagine 10 borrowers. Nine owe $10,000 each and are current. One owes $2,000 and has stopped paying. One in 10 borrowers is behind, or 10%, but only about 2.2% of the $92,000 in total balances is late. When lenders hand out smaller loans, more people can fall behind without a matching rise in the dollars at risk.

That's good news for lenders. Personal loan charge-offs, the debts lenders write off as unlikely to be repaid, fell 11% to $3.5 billion, even as the number of charged-off accounts rose. Card charge-offs edged down to $15.76 billion from $15.79 billion. It says less about the household on the other end of a late loan, which still faces the fees and credit damage.

What this means for your wallet

If your score is 660 or lower, you may see more offers than you did a couple of years ago. Paul Siegfried, TransUnion's credit card business leader, said consumers "continue to enjoy an unmatched position of competitive card offers." Still, one lender's scoring model may not match the number in your app, so treat 660 as a guide rather than a cutoff.

The offer's rate matters more than the approval. As an illustration, not a real quote, an $8,000 loan over 36 months costs about $277 a month and $1,984 in total interest at 15% APR. At 30% APR, it costs about $340 a month and $4,226 in interest, more than double. Comparing the APR, any origination fee and the total repaid across a few offers shows what a yes really costs. Our guide to debt consolidation loans covers when a new loan can help and when it only moves the problem.

A lower limit also has a side effect. Your credit utilization, the share of your available credit you're using, can climb quickly on a small limit. Spending $400 on a $500 limit means 80% utilization, which can weigh on a score even if you pay on time.

Average balances are growing too. Average card debt per borrower reached $6,678, up from $6,523, and total card balances rose 4.5% to $1.16 trillion. If you're carrying a balance, it may be worth checking your APR and your payoff date before taking on anything new.

Other debts are worth a look as well. Mortgage delinquency of 60 days or more rose to 1.64% of borrowers from 1.36%, and TransUnion said FHA loans now make up nearly half of seriously delinquent mortgage accounts. The average new-car payment reached $788, up from $761, and the average used-car payment rose to $551 from $533, based on data through August.