Reporting Agency Expects US Consumer Credit to Grow in 2019

A booming US economy as reflected by robust economic indicators is poised to fuel the growth in consumer debt in the country, according to TransUnion’s 2019 consumer credit forecast.

The NYSE-listed consumer credit reporting agency’s report attributed the decrease in the unemployment rate as well as the rise in GDP and real disposable income to the growth in most credit products. Moreover, the agency forecast serious delinquency to fall or remain steady in the next year.

TransUnion’s Vice President of Research and Consulting Matt Komos also expects that personal loans to remain strong this year. The agency estimates total balances to climb by 20% to a record high of 156.3 billion by the end of 2019. TransUnion expects the arrival of sizeable personal loan lenders, as well as the increased focus by banks and other financial companies in offering personal loan products to fuel the growth in this sector.

Auto Loans and Mortgages Seen to Decline

However, TransUnion warned that auto loans and home mortgages might suffer a decline in 2019. For auto loans, the probable rise in tariffs in cars, which can increase vehicle prices that can result in a slowdown in auto loan origination. The rising interest rates and oil prices can also affect the affordability of vehicles.

As for home mortgages, the agency predicts that fewer Americans will buy homes this year because of the hike in interest rate, increase in home prices, and limitation in supply.

New Credit Score Boosters to Boost Consumer Debt

Meanwhile, a credit card expert and a contributor to U.S. News, Beverly Harzog, discussed the credit card trends and believes one reason consumer debt will increase this year is the consumers’ easier access to credit. In her article, Harzog also said the looser credit standards in 2019 credit card use would grow this year. For her, the introduction of two credit score boosters — the UltraFICO Score and the Experian Boost — will allow consumers with low scores to have credit cards.

In her article, Harzog also mentioned the Consumer Credit G.19 report by the Federal Reserve showing that the country’s consumer revolving debt, primarily composed of credit card balances, jumped by $9.2 billion from the start of September 2018 to the end of October 2018.