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Relaxed Pandemic Restrictions Add to Credit Growth

Relaxed Pandemic Restrictions Add to Credit Growth

The TransUnion Q3 2021 Credit Industry Insights Report (CIIR) showed increased consumer credit activity; the Canada Credit Industry Indicator (CII) rose 38 points from the lowest point in the pandemic (Aug. 2020). This article explores how the combination of credit origination acceleration and higher originating credit amounts suggest lenders are relaxing pandemic risk restrictions and more aggressively growing their portfolio and balances, and how they can safely and profitably help fuel the economic rebound.

The heat is on

Account originations increased by 56% YoY. As mortgages and lines of credit increased 49% and 87% YoY, respectively, the amount of new credit issued across all credit products also increased (up 74% from the prior year) as lenders respond to consumer demand for more access to credit. “Consumer credit activity is heating up as the economy reopens and consumer confidence improves,” said Matt Fabian, Director of Financial Services Research and Consulting at TransUnion. “As the recovery continues, lenders are loosening pandemic risk policies, accelerating the supply of credit in the market and emerging for growth to meet consumer demand.”

Table 1: Total New Accounts Opened by Product Type


Q2 2020

Q2 2021

YoY Change





Auto loan




Line of credit
















New-to-credit consumers lead the rebound

The number of Canadians with credit rose 1% from the prior year, with 29.5 million consumers accessing credit in Q3 2021. This increase was primarily driven by consumers opening their first trade on credit file — specifically Gen Z (born 1997–2012) which reached 3.4 million credit-active consumers in Q3 2021 — up more than 16% YoY.

Credit card caution

Credit cards are the most popular first entry product for more than 80% of NTC consumers. With little to no credit history and lower credit scores at the onset of their credit journey, many lenders issue this cohort lower credit lines compared to more established consumers. This seems sensible, although a closer look reveals lower credit limits may constrain engagement with the product and lead to lower utilization.

What this means for lenders

This lender caution could be tempered with data-driven confidence. Although consumers tend to go delinquent on cards before other products — TransUnion’s 2021 Payment Hierarchy Study showed credit cards to be the product least prioritized for payments — government and lender programs positively impacted the credit health of consumers with delinquencies remaining low across products.

Change in Delinquency


Consumer serious delinquency (% consumers 90 days past due)

YoY bp change

Credit cards



Auto loans



Lines of credit



Unsecured personal loans






A credit to future growth

Furthermore, our research showed within the first year of using credit, 66% of NTC consumers improved their credit score, outperformed established consumers from a delinquency perspective, and 64% opened a new credit product within 24 months (second credit card or installment loan), making them an attractive growth segment.

Risks and rewards

As Canadian consumers show ongoing resilience and increasing confidence, lenders need to respond positively but prudently. This next phase of growth requires focus on not only new segments — such as new-to-credit consumers — but effective strategies to drive sustainable acquisitions, retention, engagement and profitability across all consumer segments.

Next steps

For more detailed insights, download the report. To learn more about how our data-driven market, segment and individual consumer insights can help you grow your business, contact your TransUnion representative.

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