Consumer Debt Still on the Rise Up More Than $120 Billion Versus Last Year
Auto and Installment Loans Lead the Way
TORONTO, ONTARIO--(Marketwired - June 9, 2015) - Car lending and installment loans have contributed to the country's total consumer debt of $1.544 trillion, according to Equifax Canada's Q1 2015 National Consumer Credit Trends Report.
Consumer debt increased by more than $122 billion, which is up 6.9% from $1.422 trillion a year ago. On a debt classification basis, installment loan and auto loan sectors are showing significant increases of 7.6% and 4.2% year-over-year, respectively.
"As in the U.S., auto and installment loans are increasing at high rates, explained Regina Malina, senior director of decision insights at Equifax Canada. People continue to buy - cars in particular - where competition is fierce and more subprime lenders have entered into the space. With respect to auto lending, we've also noted that many newcomers to Canada are building a good credit history by purchasing cars."
The average debt held by Canadians, excluding mortgages, has increased by 2.7% to $20,910. While personal debt climbs, consumers continue to keep up with their payments as the national 90+ delinquency rate remains low at 1.12%.
THE OIL PATCH
Credit inquiries increased mainly in Western Canada, while activity in the East has decreased. Malina believes that the full impact of lower oil prices is not fully reflected in the first quarter numbers.
"We're starting to see delinquency rate increases in Alberta, and even more so in Saskatchewan," observed Malina. "Oil prices and future economic outcomes are still being debated, but the average debt and consumer appetite for new credit are still on the rise. Careful monitoring is more important than ever at this point in time."
While increase in demand for new credit decreased overall, it remained strongest in the West, followed by Ontario, when compared to the same time last year.
REGIONAL DEMAND FOR NEW CREDIT
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Data for this report, including scores, are sourced from the Equifax Canada data warehouse, which stores the majority of credit transactions that occur in Canada. There are over 25 million unique consumer files. Transaction volumes for data are estimated at 105 million per month. Information provided in this report was adjusted to ensure that quarterly data reflects the results as of the last month of each quarter.
Equifax is a global leader in consumer, commercial and workforce information solutions that provides businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company's significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enables it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2014, Equifax was nominated as a Bloomberg BusinessWeek Top 50 company; its CIO was listed as one of the top 100 by CIO magazine; and the company was named to the Fintech 100 list, was recognized as a top 20 company to work for by the Atlanta Journal-Constitution, and was named a 2014 InformationWeek Elite 100 Winner. For more information, please visit www.equifax.com.
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