TransUnion Reports Diverging Trends in U.S. Consumer Credit Market

TransUnion's analysis indicates that while overall credit conditions remain stable, the consumer credit market is increasingly splitting into two distinct paths. The super prime segment, those with the highest credit scores, continues to expand, adding approximately 15 million consumers from Q4 2019 to Q4 2025. This growth reflects enhanced credit profiles and financial health among higher-quality borrowers.

Conversely, middle-risk tiers such as prime plus, prime, and near-prime have seen significant declines, while subprime borrowers have remained relatively stable, albeit under escalating financial pressure. This divergence not only reflects a growing gap in credit quality but also highlights the economic challenges faced by non-prime consumers, who are grappling with rising debt loads and deteriorating financial conditions.

The report emphasizes that non-prime consumers are facing mounting debt burdens, exacerbated by higher living costs. Since Q4 2019, debt levels have surged across all credit tiers, but particularly for non-prime borrowers, leading to increased debt-to-income ratios. Notably, while super prime consumers experienced a 25% increase in average total debt, subprime borrowers saw a 23% rise without the same financial resilience to absorb these higher costs.

These trends suggest that while super prime consumers are well-positioned to handle affordability challenges, those in the non-prime categories are increasingly vulnerable as their obligations consume a larger share of their income.

Despite the challenges faced by non-prime consumers, access to credit remains available. TransUnion's findings indicate that lenders have adapted their risk management strategies, particularly in bankcard lending. The share of subprime originations increased significantly, suggesting that lenders are still willing to extend credit to this segment while carefully managing their exposure.

Bankcard lending has illustrated this trend, as lenders have made strategic adjustments to credit lines. For example, super prime consumers have seen a robust 11.5% increase in new bankcard credit lines, while growth for subprime borrowers has been more modest, illustrating a cautious yet supportive approach by lenders.

The report also highlights a notable increase in bankcard originations, which rose by 13% year-over-year (YoY) to 21.9 million in Q4 2025. Super prime borrowers accounted for a significant portion of this growth, issuing a record 5.5 million cards. However, delinquency rates have also seen slight increases, with borrower-level delinquencies rising to 2.53%.

In the unsecured personal loan segment, originations reached a record high of 7.6 million in Q4 2025, up 21.7% YoY. This growth was driven by both subprime borrowers seeking cash-flow relief and super prime borrowers looking to consolidate debts. However, the delinquency rate for personal loans rose to 3.98%, reflecting the ongoing financial pressures faced by consumers.

Meanwhile, mortgage originations have seen a resurgence, particularly in refinancing, with a 12.8% increase to 1.39 million in Q4 2025. However, consumer-level mortgage delinquencies continued to rise, indicating a complex landscape where demand is rebounding but financial strain persists.

TransUnion's Q1 2026 Credit Industry Insights Report reveals a consumer credit market characterized by stark contrasts, with super prime borrowers thriving while non-prime consumers face increasing challenges. As lenders navigate this bifurcated landscape, the focus on responsible risk management remains crucial to ensuring equitable access to credit for all segments of the population. The insights provided in this report serve as a critical barometer for understanding the evolving dynamics of the consumer credit market in the context of ongoing economic pressures.