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Consumers Expected to Maintain Strong Credit Going into 2020

For the new year, the credit forecast for TransUnion 2020 looks like the credit market will be in good condition. Among other things, TransUnion reports that delinquency rates for car loans, credit cards, mortgages, and unsecured personal loans will decrease or remain stable. US consumers are expected to succeed again in 2020. This has been one of the longest periods of positive sustainable lending in the last few decades. TransUnion (NYSE: TRU) consumer credit estimates for 2020 delinquency rates for car loans, credit cards, mortgages, and unsecured personal loans will decrease or remain more or less the same.

Balance sheet activity and contributions to most major credit products are expected to grow. This strong activity is caused by low unemployment, sustained GDP growth and high consumer confidence. The US consumer credit market has been growing every year since the end of the Great Recession in 2009, marking one of the longest economic expansions in US history. 

“The U.S. consumer is as strong as ever, and TransUnion expects more of the same in 2020 … More consumers are securing loans and increasing their balances in a measured manner, all while maintaining historically low delinquency levels. Low unemployment rates, continued wage growth, and an overall sound economy are making this positive performance hold. As it’s anticipated that these positive economic trends will continue in 2020, TransUnion expects the healthy consumer credit market to continue in 2020 as well.” According to Matt Komos, vice president of research and consulting for TransUnion’s financial services.

Delinquency Rates Low Over 5 Year Trend

The delinquency rate is expected to remain low, although the recent increase in credit is worse than in previous years. For example, credit cards made in 2018 have a failure rate of 5.4% nine months after being made, compared to 4.49% for cards made in 2017. In addition to a strong economy, delinquency rates are relatively low in some cases because lenders take a balanced approach to their loan proposals. For example, the proportion of primary non-prime borrowers in most credit products is expected to remain relatively stable – much lower than a decade ago.

Total balances for all major credit products are also expected to increase overall. Unsecured personal loans are expected to grow 11% followed by credit cards (3%), mortgage loans (3%) and auto loans (3%). TransUnion’s forecasts are based on various economic assumptions, such as gross domestic product, home prices, personal disposable income, and unemployment rates. The forecasts could change if there are unanticipated shocks to the economy, such as if home prices unexpectedly fall. Better-than-expected improvements in the economy, such as greater than expected increases in GDP and disposable income, could also impact these forecasts.

What This Means for Collecting on Debt

Overall, this news is important for business owners and lenders who are hoping to collect on past due to balances or delinquent accounts because it shows that fewer and fewer people are seeking to avoid paying off what they owe. Instead of struggling to reclaim your debt, it may be a good idea to work with a professional debt collection agency, such as our team at Southwest Recovery Services in Dallas, TX.

Southwest Recivery Services: We Recover the Money You’re Owed

With years of experience and a commitment to making sure that our clients get the best possible services, we’re always prepared to go the extra mile to help you collect on any outstanding balances and restore lost revenue streams. By using professional techniques and industry knowledge, our agents will do everything possible to collect on your debts, so that you can enjoy the holidays without worrying about whether or not you’ll be able to recover the money that you’re owed. To find out more about our services, or to schedule a consultation, be sure to contact our offices right away!

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