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Consumers Expected to Keep Paying Bills in 2020: TransUnion

TransUnion is painting a “mostly sunny” picture for delinquency rates across consumer credit products in 2020, thanks to low unemployment rates, high consumer confidence, and continued economic growth.

The credit bureau and analytics company is forecasting delinquency rates for auto loans, personal loans, and mortgages will be lower by the end of 2020 than they are now, and the delinquency rates on credit cards will be marginally higher.

Looking long-term, the delinquency rates on each of those consumer credit products remains at or below historic figures dating back across the past decade, according to TransUnion.

“The U.S. consumer is as strong as ever, and TransUnion expects more of the same in 2020,” said Matt Komos, vice president of research and consulting for TransUnion’s financial services business unit. “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 true. 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.”

Delinquency rates have remained low not just because consumers are healthier financially and the economy continues to hold up, but because lenders continue to maintain a “balanced approach” to approving loan applications, TransUnion said.

Among the other trends that TransUnion said to be watching out for in 2020 were:

  • Strong performance with credit card delinquency rates
  • Slower growth rates for personal loans
  • Some softening in the auto loan origination market
  • Mortgage activity will be led by first-time homebuyers

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