Delinquency rates for credit and loan products continue to decrease as debt levels rise, aÂ new report from credit analysis agency TransUnion shows.
In light of the increasing discussion around changes to the Canadian economic picture – such as the value of the dollar and the price of oil – it is important to assess the impact of these changes on the market situation for everyday users of credit products. TransUnion’s report shows that delinquency rates for credit products with a time frame over 90 daysÂ declined to 2.58% in the second quarter of 2015. This represents aÂ a 7% drop over theÂ course of the last two years. Instalment loans in particular showed marked improvement, with delinquency dropping 14.6% yearly over the same time period.
Director of research and industry development Jason Wang notes: “The recent interest rate cuts may have in part made it easier to manage lines of credit, which typicallyÂ carry variable rates.â
Statistics like this show that the average Canadian credit user is becoming increasingly aware of good practices and discipline when it comes to repayment, as well as showing that they have the financial flexibility to actually follow through on the good advice they’ve been learning about how to best understand their credit situation, spend wisely, and manage their debt repayments on a precise schedule. The report also allows us to infer that certain governmental policies aimed to steer the wider Canadian economic course toward stability are having an impact on the population of credit users.
However, the regional analysis in the report also tells us that broader economic trends may have future effects on the same market.Â While major cities such as Toronto and Ottawa experienced the largest yearly increases in debt, AlbertansÂ continued deleveraging trends, showing signs of the change in oil prices.Â This shows that consumers in these regions are more aware of the potential risks associated with certain types of credit.