TransUnion Analysis Uncovers Surprising Truth: Inflation-Adjusted Debt Growth Much Smaller Over the Last Five Years

Rhea-AI Summary

TransUnion's Q1 2025 Credit Industry Insights Report reveals that while total consumer credit balances grew from $14.1T to $18.0T (28%) between Q1 2020 and Q1 2025, inflation-adjusted growth was only 3%. Most credit risk tiers saw real balance declines, with prime consumers experiencing a 14% drop, while super prime saw 18% growth mainly due to mortgages. Only subprime showed a modest 1.9% real increase. Key metrics across credit products show mixed trends: Credit card delinquencies (90+ days) decreased to 2.43%, marking two consecutive quarters of YoY decline. Personal loan originations hit a record 6.3M in Q4 2024. Mortgage originations increased 30.2% YoY to 1.2M, though delinquencies rose to 1.44%. Auto loan originations grew 8% YoY to 6.2M, with super prime leading at 15.7% growth.

Positive

• Inflation-adjusted total balance growth was modest at 3%, indicating responsible credit usage
• Credit card delinquencies declined for two consecutive quarters, first time since 2020
• Personal loan originations reached record high of 6.3M in Q4 2024
• Mortgage originations increased 30.2% YoY
• Auto loan originations grew 8% YoY across all risk tiers

Negative

• Mortgage delinquencies increased for 12th consecutive quarter, up 21 basis points YoY
• Auto loan delinquencies reached 1.38%, exceeding 2009 peak levels
• Subprime consumers showed real balance growth of 1.9%, indicating financial stress
• Average new mortgage loan amounts increased by $40,000 YoY, affecting affordability

Insights

Credit & Consumer Finance Analyst

TransUnion data reveals inflation erases most debt growth; only super prime and subprime tiers show real balance increases.

TransUnion's Q1 2025 report provides a refreshingly nuanced view of consumer credit health by adjusting debt figures for inflation. While nominal consumer debt grew 28% from Q1 2020 to Q1 2025 (reaching $18 trillion), inflation-adjusted growth was just 3% - a crucial distinction that transforms our interpretation of the data.

The inflation adjustment reveals fascinating demographic patterns. Super prime borrowers showed the strongest real balance growth at 18.2%, primarily due to mortgage activity - suggesting these consumers are confidently leveraging their excellent credit for wealth-building. Meanwhile, prime plus (-11.7%), prime (-13.5%), and near prime (-9.9%) all experienced significant real balance declines, indicating responsible deleveraging despite economic pressures.

Only subprime borrowers showed modest real balance growth (1.9%), likely reflecting their vulnerability to inflation's impact on essential expenses. This divergence between credit tiers suggests a bifurcated recovery where the most and least creditworthy consumers are increasing borrowing, while the middle tiers exercise caution.

The product-specific data reinforces this stability narrative. Credit card delinquencies (2.43%) declined year-over-year for two consecutive quarters - the first such streak since 2020. Personal loan originations reached record levels with 6.3 million new accounts in Q4 2024, yet overall delinquency rates declined to 3.49% from 3.75% last year. Mortgage originations increased 30.2% year-over-year in Q4 2024, though delinquencies ticked up slightly to 1.44%. Auto loan originations grew 8% year-over-year across all risk tiers.

This comprehensive dataset suggests consumers are largely managing their debt responsibly despite persistent inflation, with concerning signals limited primarily to specific segments rather than indicating broad financial distress.

Despite Overall Debt Growth, Inflation-Adjusted Figures Reveal Declines in Real Balances Across Most Credit Risk Tiers

CHICAGO, May 22, 2025 (GLOBE NEWSWIRE) -- As consumers grapple with rising costs and high interest rates, recent studies have revealed an increased reliance on credit products to help make ends meet. Despite the seemingly rapid growth in balances, a new analysis by TransUnion (NYSE: TRU) uncovers a more complex reality.

According to TransUnion’s newly released Q1 2025 Credit Industry Insights Report (CIIR) total consumer balances have steadily increased over recent years. Total balances in nominal dollar terms (before adjusting for inflation) across all consumer credit products rose from $14.1 trillion in Q1 2020 to $18.0 trillion in Q1 2025, approximately 28%. The cumulative Consumer Price Index increase over that same time period, as measured by the U.S. Bureau of Labor Statistics, was nearly 24%. When adjusted for inflation, total balance growth in real dollar terms is more modest, amounting to $0.5 trillion over the five-year period, an increase of closer to 3%.

The analysis also revealed that inflation-adjusted balances for consumers actually declined in real dollar terms across the majority of credit risk tiers from 2020 to 2025. This decrease was most pronounced in the prime risk tier, which saw a 14% drop in balances after adjusting for inflation. In contrast, super prime consumers experienced an 18% growth in balances over the same period. Much of the increase for super prime borrowers was attributed to higher mortgage balances. The only other risk tier to see an inflation-adjusted increase over the period was subprime at 1.9%.

“Our latest analysis reveals a picture of credit usage that goes beyond simply an increase in total balances,” said Jason Laky, executive vice president and head of financial services at TransUnion. “When we account for the recent period of higher inflation, the rise in balances suggests that consumers in most risk tiers are not over-extended. In fact, many consumers experienced significant income gains since 2019, which have enabled most borrowers to effectively manage their debt levels.”

Total Inflation-Adjusted Balances Across All Accounts Have Declined Across The Majority of Risk Tiers Since 2019

	% nominal dollar change 2020 to 2025	% real dollar change for 2020 to 2025 – inflation adjusted
Super prime	46.5%	18.2%
Prime plus	9.4%	-11.7%
Prime	7.2%	-13.5%
Near prime	11.6%	-9.9%
Subprime	26.2%	1.9%

Source: TransUnion U.S. Consumer Credit Database

"These findings challenge the idea that consumers are simply accumulating credit card debt. Instead, they highlight how balances reflect the current economic reality," said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. "It's understandable that only subprime consumers have experienced an inflation-adjusted increase in real credit card average balances, as this demographic has likely felt the impact of higher costs most acutely. But for other risk tiers of borrowers, their card balance growth has been less than the rate of inflation, indicating that many consumers may have further borrowing capacity."

To learn more about the latest consumer credit trends, register for the Q1 2025 Quarterly Credit Industry Insights Report webinar. Read on for more specific insights about credit cards, personal loans, auto loans and mortgages.

Serious consumer-level credit card delinquencies decline YoY for second consecutive quarter

Q1 2025 CIIR Credit Card Summary

The first quarter of 2025 reflected credit card trends indicating a return to equilibrium, similar to those observed towards the end of 2024. Notably, consumer-level delinquencies of 90+ days past due decreased for the second consecutive quarter, dropping by 12 basis points year-over-year (YoY) to 2.43%. This marks the first consecutive quarters of YoY delinquency decline since 2020, during the height of the pandemic. In Q4 2024, total originations volume experienced a slight YoY increase of 0.1%. Although modest, this represents the first YoY growth in six quarters. Subprime originations saw a YoY growth of 2.9% in Q4 2024, the first in eight quarters, while super prime originations grew by 5.3% for the second consecutive quarter. Despite the uptick in originations, credit line amounts on new cards continue to trend downward. The average credit line on new accounts decreased slightly by 0.3% YoY in Q4 2024, with growth in super prime lines offsetting smaller lines in prime and below.

Instant Analysis

"We continue to observe signs that serious delinquencies may have peaked, with consumers managing their credit card usage more effectively. The year-over-year decline in 90+ days past due delinquencies, along with slower balance growth and stable utilization rates, indicates emerging market stability. We anticipate further declines in serious delinquencies in the coming quarters, primarily due to lenders' intentional management of credit lines and cardholder risk profiles."

- Paul Siegfried, senior vice president and credit card business leader at TransUnion

Q1 2025 Credit Card Trends

Credit Card Lending Metric (Bankcard)	Q1 2025	Q1 2024	Q1 2023	Q1 2022
Number of Credit Cards (Bankcards)	563.0 million	543.1 million	523.2 million	490.0 million
Borrower-Level Delinquency Rate (90+ DPD)	2.43%	2.55%	2.26%	1.62%
Total Credit Card Balances	$1.07 Trillion	$1.02 Trillion	$917 billion	$769 billion
Average Debt Per Borrower	$6,371	$6,218	$5,733	$5,026
Number of Consumers Carrying a Balance	172.0 million	169.0 million	165.3 million	158.9 million
Prior Quarter Originations*	19.4 million	19.3 million	20.6 million	21.2 million
Average New Account Credit Lines*	$5,612	$5,628	$5,421	$4,634

*Note: Originations are viewed one quarter in arrears to account for reporting lag.
Click here for a Q1 2025 credit card industry infographic. For more credit card industry information, click here for episodes of Extra Credit: A Card and Banking Podcast by TransUnion.

Shift to less risky borrowers drives decline in unsecured personal loan delinquency in Q1 2025

Q1 2025 CIIR Unsecured Personal Loan Summary

In Q4 2024, unsecured personal loan originations hit a new high of 6.3 million, a 26% increase over Q4 2023, driven by all risk tiers, especially super prime, with 29% growth YoY. This led to a 17% YoY growth in total new account balances to $34 billion. Total balances for Q1 2025 only grew for above prime tiers, reaching $253 billion, a 3% increase over the prior year. A record 24.6 million consumers had balances, a 5% increase YoY, but average balances per consumer only grew for above prime tiers. Lenders expanded their borrower base but maintained cautious exposure, leading to a 7% decrease in average new account balances for Q4 2024, the fifth consecutive quarter of decline. Subprime delinquencies fell to 14.0% in Q1 2025 from 15.6% last year, while other risk tiers saw increases. The overall borrower-level delinquency rate declined to 3.49% in Q1 2025 from 3.75% last year, thanks to a balanced lending mix.

Instant Analysis

“The unsecured personal loan market has not only rebounded but also expanded, setting new records in loan volumes and balances. Growth is evident across all credit risk tiers, with super prime borrowers leading in year-over-year growth in the most recent quarter. Lenders appear to be limiting loan amounts for individual consumers, even as the aggregate borrower-level delinquency rate continues to decline. Increased competition and demand in the lowest risk credit tiers, along with advances in risk management practices, are now resulting in lower delinquency rates. These factors should support sustained growth, even in a challenging macroeconomic environment.“

- Josh Turnbull, senior vice president and consumer lending business leader at TransUnion

Q1 2025 Unsecured Personal Loan Trends

Personal Loan Metric	Q1 2025	Q1 2024	Q1 2023	Q1 2022
Total Balances	$253 billion	$245 billion	$225 billion	$178 billion
Number of Unsecured Personal Loans	29.8 million	28.1 million	26.9 million	23.9 million
Number of Consumers with Unsecured Personal Loans	24.6 million	23.5 million	22.4 million	20.4 million
Borrower-Level Delinquency Rate (60+ DPD)	3.49%	3.75%	3.91%	3.25%
Average Debt Per Borrower	$11,631	$11,829	$11,281	$9,896
Average Account Balance	$8,496	$8,737	$8,356	$7,448
Prior Quarter Originations*	6.3 million	5.0 million	5.2 million	5.7 million

*Note: Originations are viewed one quarter in arrears to account for reporting lag.
Click here for additional unsecured personal loan industry metrics. Click here for a Q1 2025 unsecured personal loan industry infographic.

Mortgage originations see YoY growth as delinquencies tick up

Q1 2025 CIIR Mortgage Loan Summary

Another sign that the previously sluggish mortgage originations market is beginning to rebound is that mortgage originations saw a YoY increase of 30.2% in Q4 2024, reaching 1.2 million, with 78% of those being purchase originations. The 15.4% YoY growth in purchase originations marks its first annual increase since Q2 2021. Origination volumes remain low compared to historical norms. Home equity originations rose 11% YoY, marking the third consecutive quarter of YoY increases. Meanwhile, 60+ days past due (DPD) account-level delinquencies ticked up YoY in Q1 2025 for the 12th consecutive quarter, reaching 1.44%. This represents a growth of 21 basis points YoY in Q1 2025, though the rate remains relatively low compared to historical levels. As home prices continue to climb, the average amount of new mortgage loans has followed suit, increasing by nearly $40,000 YoY to $366,443 in Q4 2024.

Instant Analysis

"Due to the anticipated impacts of announced tariffs on near-term inflation, mortgage rates are expected to remain elevated above 6% in the next quarter. Without a significant decrease in mortgage rates, origination activity for both purchases and refinances is likely to remain subdued. Although the upward trend in mortgage delinquencies continues, the levels remain below long-term averages, and far below historical highs during the Great Financial Crisis, but still warrant close monitoring."

- Satyan Merchant, senior vice president, automotive and mortgage business leader at TransUnion

Q1 2025 Mortgage Trends

Mortgage Lending Metric	Q1 2025	Q1 2024	Q1 2023	Q1 2022
Number of Mortgage Loans	53.6 million	53.2 million	52.9 million	51.5 million
Consumer-Level Delinquency Rate (60+ DPD)	1.36%	1.14%	0.90%	0.80%
Prior Quarter Originations*	1.2 million	0.9 million	1.0 million	2.9 million
Average Loan Amounts of New Mortgage Loans*	$366,443	$327,102	$327,050	$315,661
Average Balance per Consumer	$266,843	$260,745	$253,514	$241,203
Total Balances of All Mortgage Loans	$12.5 trillion	$12.1 trillion	$11.8 trillion	$10.9 trillion

* Originations are viewed one quarter in arrears to account for reporting lag.
Click here for additional mortgage industry metrics. Click here for a Q1 2025 mortgage industry infographic.

Auto originations trend up ahead of tariffs

Q1 2025 CIIR Auto Loan Summary

Auto loan originations in Q4 2024 reached 6.2 million, representing an 8% YoY growth. This growth was observed across all risk tiers, with super prime leading at 15.7% YoY growth. The increase was largely driven by Federal Reserve interest rate cuts in late 2024, rising inventories, and the return of incentives. New vehicles made up 47% of those financed in Q4 2024, as compared to 53% used, the highest Q4 share for new vehicles since pre-pandemic times. Leasing share continued to approach pre-pandemic levels, rising to 26% in Q1 2025. The 60+ DPD delinquency rate increased by 5 basis points YoY in Q1 2025 to 1.38%. This rate exceeds the peak delinquency rate of 1.33% observed in Q1 2009, although the rate of growth has recently slowed. Overall, new vehicle loan vintages continue to show consistent performance compared to pre-pandemic periods (2018/2019). However, when broken down by risk tiers, recent new vehicle vintages have elevated delinquency levels, particularly for prime and below tiers.

Instant Analysis

"There have been positive signs of recovery and momentum across all tiers, not just super prime. The return of incentives has provided a tailwind to vehicle sales and financing. Nevertheless, some of this progress may reverse if the recently announced trade policies are implemented long-term, as they could further impact affordability. Despite this, we expect Q1 2025 originations to increase, as many consumers likely tried to secure a new vehicle before the tariffs were implemented.”

- Satyan Merchant, senior vice president, automotive and mortgage business leader at TransUnion

Q1 2025 Auto Loan Trends

Auto Lending Metric	Q1 2025	Q1 2024	Q1 2023	Q1 2022
Total Auto Loan Accounts	80.0 million	80.1 million	80.1 million	80.5 million
Prior Quarter Originations1	6.2 million	5.8 million	5.8 million	6.5 million
Average Monthly Payment NEW2	$759	$746	$741	$657
Average Monthly Payment USED2	$526	$521	$521	$509
Average Balance per Consumer	$24,413	$24,035	$23,214	$21,606
Average Amount Financed on New Auto Loans2	$42,877	$41,222	$41,539	$40,184
Average Amount Financed on Used Auto Loans2	$26,494	$25,655	$26,260	$27,995
Consumer-Level Delinquency Rate (60+ DPD)	1.56%	1.50%	1.34%	1.09%

¹Note: Originations are viewed one quarter in arrears to account for reporting lag.
²Data from S&P Global Mobility AutoCreditInsight, Q1 2025 data only for January and February.
Click here for additional auto industry metrics. Click here for a Q1 2025 auto industry infographic.

For more information about the report, please register for the Q1 2025 Credit Industry Insight Report webinar.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.

http://www.transunion.com/business

Contact	Dave Blumberg
	TransUnion
E-mail	dblumberg@transunion.com
Telephone	312-972-6646

FAQ

What is TransUnion's (TRU) inflation-adjusted consumer debt growth from 2020 to 2025?

TransUnion's analysis shows that while nominal debt grew 28% from $14.1T to $18.0T, the inflation-adjusted (real) growth was only 3%, amounting to $0.5T over the five-year period.

How did different credit risk tiers perform in TransUnion's 2025 Q1 report?

Super prime consumers saw 18.2% real balance growth, while prime tiers experienced declines (prime: -13.5%, prime plus: -11.7%). Subprime showed modest 1.9% real growth, and near prime declined by 9.9%.

What are the current credit card delinquency trends according to TransUnion's Q1 2025 report?

Credit card delinquencies (90+ days past due) decreased to 2.43%, marking the first consecutive quarters of year-over-year decline since 2020.

How did mortgage originations perform in TransUnion's Q1 2025 report?

Mortgage originations increased 30.2% year-over-year to 1.2 million in Q4 2024, with 78% being purchase originations. However, volumes remain low compared to historical norms.

What are the auto loan trends in TransUnion's Q1 2025 analysis?

Auto loan originations grew 8% year-over-year to 6.2 million, with super prime leading at 15.7% growth. However, delinquency rates increased to 1.38%, exceeding the 2009 peak rate of 1.33%.