TransUnion’s new TruVision Trended Risk Score expands lenders’ insights into consumers who may not otherwise be scoreable, helping increase financial inclusion.
TransUnion Canada is helping expand credit access for new Canadians and those new to the credit market by providing a broader and more comprehensive view of a person’s payment behaviour and creditworthiness with TruVision Trended Risk Score. The TruVision Trended Risk Score leverages new algorithms and attributes that provide deeper insights on consumers, utilizing data that captures how consumer credit spending and payment patterns have evolved since the pandemic. For New-to-Credit (NTC) consumers, TruVision Trended Risk Score leverages the power of signals early in their credit tenure to better predict future risk, giving lenders the insights they need to more confidently offer credit and grow with new consumers.
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“New Canadians and young consumers represent a significant portion of Canada’s population and economic power. They are actively working to build their credit profile and access to credit. With TruVision Trended Risk Score, consumers will be able to build their credit profile quicker and gain access to more credit opportunities,” said Juan Sebastian D’Achiardi, regional president of TransUnion Canada. “By offering lenders a more holistic view of consumers, they will now have better access to behavioural insights and information, increasing their ability to more confidently offer a wider range of products and services.”
According to Statistics Canada, international migration, including permanent and temporary immigration, continues to drive population growth in Canada, accounting for 92% of all growth in the third quarter of 2024. In 2024, NTC consumers accounted for 28% of new credit cards opened, and 22% of all credit products opened, with new to Canada consumers estimated to account for more than half of that volume.
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Gen Z Canadians, born between 1997 and 2012, remain the fastest growing segment in credit card usage, with an 18% year-over-year (YoY) growth rate in balances, compared to a 4% YoY growth rate among other generations. Gen Z consumers have accumulated $142 billion in overall credit balances as of December 2024, representing a 29.5% YoY increase, significantly outpacing the overall 4.5% balance growth rate.
While this generation represents a tremendous growth opportunity for lenders, these consumers exhibit higher risk, with a 0.57% delinquency rate (90 days or more days past due), compared to an average of 0.28% across other generations as of Q4 2024. Lenders can still turn to this generation to increase lending and grow by employing effective tools for credit decisioning to manage risk effectively.
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“While navigating an uncertain macroeconomic environment and turbulent market conditions, lenders can now modernize their credit strategies and more confidently grow their portfolios by extending credit to young Canadians, new immigrants, and other Canadians seeking to expand their credit portfolio,” said Pamela Dodaro, chief product officer at TransUnion Canada. “Those that explore innovative ways to monitor rapid changes in consumers’ financial health will be better positioned to capture new and growing consumer segments.”
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Source – Businesswire
