TransUnion Q4 2018 Industry Insights Report

The Canadian credit market, while generally stable, is beginning to show some pressures as a result of rising interest rates, regional volatility, shifting demographics and continued fallout in the mortgage market.

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Matthew Fabian

“Delinquency rates, while still falling overall, are slowing in their descent, and we’re seeing a higher risk of defaulting on credit payments among younger demographics, which represent the biggest growth segment within the credit market. Continued support in financial literacy will be key for this demographic to help manage risk.”

Matthew Fabian, Director, Research and Industry Insights

90+Day Delinquency Rate YoY Changes for Non-Mortgage Loans

90+Day Consumer Delinquency Rate

As interest rates rise, debt affordability is still relatively strong at the national level – but we are starting to see some signs of weakness in specific parts of the market. Some regional insolvency trends suggest certain segments of consumers are beginning to feel the burden of increased debt in a higher rate environment.

Average Consumer Balance, by Product Chart*

Average Consumer Balance, by Product*


*Represents the average balance held by a consumer across each type of product (consumers can have multiple instances of same product)


With almost 29 million Canadian consumers having access to credit (up 1.1% year-on-year), overall levels of debt continue to grow. Overall, average non-mortgage consumer debt balances increased to $30,257, a 3.64% increase from the prior year, while consumer delinquency rates overall are holding steady at 5.23% - a 7 basis point decline from Q4 2017. Most major credit products continue to exhibit balance growth while delinquency rates remain low and most products showed a decline in delinquency from the previous year.

“Our forecast for 2019 remains unchanged in that the average non-mortgage related debt balance will continue to increase for Canadians to $31,000 by year-end 2019, but overall delinquency will continue to fall to 4.7% as consumers continue to manage their credit obligations.”

Matthew Fabian, Director, Research and Industry Insights

Generational Credit Shift

As expected, the Canadian credit market is undergoing a shift in the types of borrowers driving consumer credit growth as older generations exit the credit market and newer generations enter and grow. Both Millennial (born 1980 to 1994) and Gen Z (born 1995 or later) consumers experienced significantly higher yearly percentage increases of 12.6% and 22.9%, respectively.

As consumer debt continues to increase, it’s clear that the youngest generations are playing a critical role in the consumer credit market. Millennials are taking on additional balances as they reach significant life events that put pressure on their overall wallet—many of them are now supporting children, purchasing homes and acquiring additional vehicles. These costs may be financed through additional borrowing, so this growth in debt is not surprising.



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