The latest TransUnion debt report shows total debt continued to grow in the first quarter compared with the year before, driven mainly by young people and newcomers.
The credit-tracking agency says Gen Z consumers saw their outstanding balances grow 30.6% from the prior year.
The report says total outstanding debt grew 4.7% to $2.5 trillion in the first quarter year-over-year.
Delinquencies, or missed payments, were also up 11 basis points year-over-year to 2.7% — mainly driven by new-to-credit consumers.
The report also shows subprime consumers continued to struggle as their delinquency rates rose at significantly higher rates than prime and above-prime consumers.
Matt Fabian, director of financial services research at TransUnion Canada, says higher balances from high-risk credit consumers signal a critical moment for lenders to reassess risk strategies.