TORONTO, Jan. 31, 2024 (GLOBE NEWSWIRE) — With the number of Canadian consumers enrolled to monitor their credit with TransUnion® (NYSE: TRU) showing an 11x increase between 2018 and 2023, a new global study has found that the motivations for consumer credit monitoring are diverse. In Canada, the largest share of surveyed consumers (45%) monitor with the goal of better managing their debt levels and preventing fraud activities, while four in 10 (42%) do so in anticipation of opening a new credit account, and 13% seek to improve their credit profile.
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To better understand the distinct profiles, motivations, and long-term outcomes of customers monitoring credit, TransUnion conducted a global study examining the credit behaviors of millions of customers in evolved and emerging markets: Canada, Brazil, Chile, Colombia, Dominican Republic, Guatemala, Hong Kong, India, the Philippines, South Africa, the United Kingdom, and the United States. To better identify how those benefits promote credit education and enable financial inclusion, the study used de-identified credit data to analyze those findings for key customer credit segments: new credit sss customers, underserved customers, and customers with sss creditss.
“Consumer credit tracking has grown particularly in terms of awareness and usage over the past decade. This expansion has recently been fueled by the impact of the pandemic on customer finances and the fact that customers are becoming increasingly accustomed to falling victim to credit fraud. ” said Nidhi Verma, co-author of the study and head of foreign studies and advice at TransUnion. “Our study measures the importance of ssss credit schooling and quantifies the benefits customers get when it comes to ss credit tracking. These benefits have been shown to help lead to higher credit profiless, greater access to creditss, or a greater ability to repay debts, depending on the intent of the clients monitoring the creditsss.
In Canada, 71 per cent of consumers surveyed said it’s important to monitor their credits, and nearly a fifth (17 per cent) said it’s very important. This finding shows that consumers are very aware of tracking their credits and are most likely due to the increase in tracking activity in recent years.
TransUnion surveyed Canadian consumers to understand their initial goal of hiring credit tracking services and the actual benefits they received. The most common reasons consumers first requested credit tracking services were that it was flexible (36%), for their credit scores (32%) and to check the accuracy of their report (27%).
In addition, after tracking facilities for a while, Canadian consumers reported additional benefits that credit tracking has given them: learning how to monitor and manage their credit score (43%), gaining visibility into adjustments on their credit report (37%). , stumbling into fraud (30%) and settling debts (21%).
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The study identifies three more distinct segments of consumers who monitor their credits, based on their primary motivation for tracking their credits. These include credit applicants, credit managers, and credit enhancers.
Credit applicants gain advantages when discharging new credits. Almost part of the population guilty of tracking creditsss (42%) do it to download new creditss. Credit applicants are consumers with close or higher credit scores who monitor their credit with the goal of opening new credit accounts. Comparing credit applicants who monitor their credits with those who don’t, consumers who monitor their credits open 1. 22 times more credit accounts, such as auto loans and auto loans, over the next year.
New credit consumers (NTCs), those who are at the beginning of their credit journey, and underserved consumers, those who are less involved in the overall credit market, experienced similar levels of new credit activity. creditsss for the credit tracking segmentssNTC consumers who monitor their creditss have origination rates 1. 19 times higher for any type of creditss than those who have no credit tracking historys, and for credit monitors”For consumers of new and underserved credit, who have a harder time expanding their credit portfolio, credit tracking can be a very important catalyst for increased schooling and access to credit,” Verma said.
Percent of Consumers Originating a New Credit Card within One Year of Starting Credit Monitoring
*Unmonitored consumers were analyzed for the same time period from the date monitored consumers with credits with similar credit profiles began tracking services.
Credit servicers benefit from debt repayment and fraud detection. As debt levels have reached near-record levels in recent years, the study found that the largest proportion of Canadian consumers (45%) monitor their credit with the goal of controlling their overall balances and credit health. Credit servicers are explained as consumers with near or higher credit scores who monitor their credit for the purpose of trimming or maintaining balances or tracking fraud.
When surveyed, 21% of all Canadian credit monitoring consumers said they were able to pay down debt as a result of credit monitoring. In alignment, the study found that Credit Managers decreased their overall balances by an average of 11% within a year after starting monitoring. “Though we are in a high-interest rate environment with consumer credit balances at near-record levels, it’s reassuring to see so many Canadians taking the initiative to ensure they are paying down or managing their debt levels,” added Verma.
Another important motivation reported through credit servicers is fraud protection. Nearly one-third (32 per cent) of Canadian consumers said they continue to use credit tracking over time to detect and protect against fraud. to consumers given the continued accumulation of fraudulent activity observed since the onset of the COVID pandemic. Nearly a portion (49%) of Canadians reported recent fraudulent activity in the second quarter of 2023, with telecom fraud attempts expanding 400% year-over-year. year in which 3 months.
Lenders take advantage of credit tracking and stay up-to-date on their obligations. Lenders, which account for 13% of Canada’s credit-tracking population, are explained as consumers with high-risk (poor) credit scores who are likely to use credit tracking. to perceive your existing SSS credit scenario and take action for your SSSS credit scores.
The study found that credit improvers in Canada experienced an improvement in their credit scoresss of 32 points on average, one year after they began tracking their credits. The improvement was 37 points for NTC customers, those borrowers who recently opened their first ssss credit account. In either case, the improvement in scores was greater than in a comparison set of consumers who have no history of credit tracking.
Improvement of the average score one year after the start of credit tracking
* Unmonitored consumers were analyzed during the same time as the date monitored consumers with credit with similar credit profiles began tracking services.
“While ssss loans make up the smallest segment of ss credit tracking consumers in Canada, they also have a tendency to see significant benefits from ssThis indicates that consumers who actively pursue their credit score can achieve greater effects if they monitor their credits and are able to plan their steps and track their progress. “
Free credit monitoring benefits consumers and lenders To help more consumers improve their credit scores, many financial institutions offer free credit monitoring tools. This not only helps consumers but also allows lenders to build stronger relationships with their customers.
Over one-third of Canadian consumers (36%) said they initially signed up for credit monitoring because it was free. Four in ten (40%) said that they would continue to bank with a lender that offered free credit monitoring, and nearly one quarter of these customers (23%) stated they would prefer the lender providing free credit monitoring services over other lenders when opening new products. Nearly one fifth (17%) said they would prioritize payments to that lender over other lenders’ payments.
“Consumers now expect money institutions to offer flexible credit tracking services because it provides them with the right equipment for their credit profile, better manages existing credit, and seeks new long-term credit. Offering such services obviously benefits monetary establishments, as many of their consumers are more likely to stand firm to them in their long-term lending activities,” Fabian concluded.
For more data on TransUnion’s global credit monitoring study, click here. Consumers interested in getting their TransUnion credit report, credit score, and access to more equipment to make credit plans can stop here. Learn more about how TransUnion is helping Americans against identity theft here. .
About TransUnion® (NYSE: TRU)
TransUnion is a global data and analytics company with more than 13,000 affiliates operating in more than 30 countries, including Canada, where we are the credit bureau of choice for many of Canada’s largest banks. We make us accept the imaginable by making sure that each and every user is reliably represented in the market. We do this by offering an actionable, conscientiously managed view of consumers.
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.
For information, please visit: www. transunion. ca
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1 A new credit customerss is a customer with no credit historys but no more than 2 accounts recently opened for the same type of product. 3 Consumers served are those who are active and visual customers of ss credits who have at least two years of credit history, have at least 3 credit accounts recently opened, or have had at least two other types of credit products lately or in the past.
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