Canadian Household Debt Reaches $2.6 Trillion as Balanced Growth Emerges at Both Ends of the Risk Spectrum
Key findings from TransUnion report:
- Nearly one-in-five Canadians improved their credit score over the past year
- Canadian consumer credit delinquencies remained stable as consumers and lenders have adjusted to the evolving economic landscape
- Canada's credit market poised for growth as economic conditions improve, and innovation creates opportunities for expanded credit access
TORONTO, Feb. 25, 2026 (GLOBE NEWSWIRE) -- In the fourth quarter of 2025, Canadian household debt reached $2.6 trillion across all credit products, according to TransUnion's Q4 2025 Credit Industry Insights Report (CIIR). While overall debt grew 4.3% year-over-year (YoY), the number of credit active Canadians (number of Canadians with at least one credit product) increased by only 1.2%. Population growth has not been as strong a driver of balance growth recently, as lower immigration over the past 18 months has reduced demand from new‑to‑credit consumers.
Rising outstanding balances alongside slower growth in the credit‑active population indicates that borrowing activity is concentrated among existing credit users. This pattern is likely being driven by consumers using credit more actively as a financial management tool, suggesting that this trend reflects a healthier, expanding economy rather than elevated financial stress.
In Q4 2025, Canada's Consumer Credit Industry Indicator (CII) rose one point from the third quarter to 99.3, though it remained unchanged YoY. This stability was driven by the offsetting effects of continued higher credit usage and increased demand for credit, combined with a slight increase in delinquency rates and lower credit supply.
Risk Distribution Remains Healthy as Score Migration Improves
Canada's credit market remains stable, with the overall risk distribution of credit‑active Canadians skewing to better risk tiers1. TransUnion insights show that Canadians in prime and better risk tiers (those with stronger repayment performance) remain firmly in the majority, increasing modestly from 71.0% in Q4 2024 to 71.6% in Q4 2025—signalling continued consumer credit resilience. Growth is particularly notable within the super prime tier (consumers considered lowest risk and with the highest credit standing), whose share rose from 40.2% to 42.1% over the same period. This steady migration into lower‑risk segments reflects the ongoing strength and resilience of Canada's credit‑active population.
Two-thirds of Canadians remained in the same risk tier over the past year, while 19.4% improved their credit standing and migrated to a better risk tier and 14.4% moved into a worse risk tier. This downward movement is still noteworthy: 5.2% of consumers fell from prime or above into near prime or subprime categories, a shift that may signal financial stress for those households.
Prime, prime plus and super prime consumers continue to drive majority of credit balances in Canada. More than 70% of Canadians with credit fall within prime and above prime tiers, led by the ongoing expansion of the super prime segment – now over 42% of all credit active consumers and up 2 bps. This concentration of credit among lower‑risk segments reinforces the overall stability of the credit market.
| Distribution of Canadian Credit Active Consumers by Risk | |||
| Q4 2023 | Q4 2024 | Q4 2025 | |
| Super prime | 39.9% | 40.2% | 42.1% |
| Prime plus | 14.9% | 15.1% | 14.9% |
| Prime | 16.2% | 15.7% | 14.6% |
| Near prime | 19.1% | 19.0% | 18.3% |
| Subprime | 9.8% | 10.0% | 10.0% |
Super prime borrowers hold the largest share of debt, growing by $162 billion in two years to $1.41 trillion – a 6.9% YoY increase in 2025. Overall, the vast majority of outstanding debt – 81.6% – is held by better-risk borrowers in prime and above risk tiers. The majority of this debt is concentrated in mortgages and generally considered lower risk due to strict underwriting guidelines.
Subprime borrowers held the smallest share of balances at 5.0%, but saw the highest balance growth rate in 2025 at 8.9% YoY, pointing to increasing reliance on credit among financially vulnerable households. This acceleration of subprime debt may warrant close monitoring to ensure against rising defaults and sustain profitable growth.
| Total Consumer Credit Debt by Risk Tier ($ Billions) | ||||
| Q4 2023 | Q4 2024 | Q4 2025 | YoY change 2024-2025 | |
| Super Prime | $1,245 | $1,315 | $1,406 | 6.9% |
| Prime Plus | $381 | $389 | $387 | -0.4% |
| Prime | $318 | $320 | $319 | -0.3% |
| Near Prime | $327 | $340 | $348 | 2.4% |
| Subprime | $105 | $119 | $129 | 8.9% |
"We're seeing credit growth at both ends of the risk spectrum. While subprime consumers only hold a relatively small share of the overall household debt, their balances are rising, suggesting some financially vulnerable households are relying more heavily on credit to manage everyday costs. At the same time, super prime borrowers continue to expand their credit use from a position of strength," said Matt Fabian, director of financial services research and consulting at TransUnion Canada. "For lenders, this poses a dual challenge: supporting responsible growth among lower-risk consumers, while addressing the risk of growing credit exposure for subprime households. Enhanced and proactive risk management and inclusive lending strategies will be critical to maintaining stability and supporting upward mobility in 2026."
Canadian Consumer Credit Delinquencies Stabilize as Economic Conditions Normalize
After rising steadily since 2021, delinquency rates (missed or late debt repayments) largely stabilized across major credit products in Q4 2025. From Q4 2021 to Q4 2023, delinquencies increased sharply across all products, driven in part by inflation and interest rate hikes. In 2024 and 2025, the pace of deterioration slowed significantly as both consumers and lenders adapted to the changing economic environment.
While some credit products continued to see modest increases in delinquency rates YoY in Q4 2025, the pace of deterioration slowed compared to recent years – pointing to a potential plateau.
- Credit card consumer delinquencies (the percentage of credit card holders 90 or more days past due) rose 2 bps to 0.95% in Q4 2025, the smallest annual increase since 2021. For Canadian lenders, this points to stabilizing, but still elevated, revolving credit stress, supporting lender strategies of targeted line management and collections for higher-risk segments rather than broad-based tightening.
- Serious consumer mortgage delinquency (60+ days past due) remained very low overall, increasing 3 bps to 0.29%. The continued low delinquency level suggests system-wide mortgage credit quality remains resilient, reinforcing the resilience of mortgage credit quality and supporting continued prudent mortgage lending to qualified borrowers.
- Installment loan serious consumer delinquency (60+ days past due) was an outlier, rising YoY from 2.44% to 2.68% (+24 bps); however, the growth rate slowed compared to previous YoY increases. Given the high concentration of installment lending in the subprime and near prime segments, the increase in serious delinquency is consistent with expected post‑downturn behaviour, as more financially vulnerable consumers continue to lag in recovery. For lenders, this reinforces the need for disciplined underwriting and loss forecasting rather than signaling a renewed broad-based deterioration.
- Auto loan consumer serious delinquency rates (60+ days past due) saw the only YoY improvement, down 5 bps to 0.90% and marking the first improvement in four years. Lenders may be positioned to selectively expand approvals and recalibrate pricing, especially for prime borrowers, as loss trends improve. Consumers could see slightly better financing availability—though affordability constraints may still keep non-prime terms selective.
The combination of stabilizing economic indicators, tighter lender risk management and improving consumer sentiment is contributing to a more balanced and resilient credit environment heading into 2026.
Consumer-Level Serious Delinquency by Product
| Cards 90+ DPD | Auto 60+ DPD | LOC 60+ DPD | Install 60+ DPD | Mortgage 60+ DPD | |
| Q4 2024 | 0.93% | 0.95% | 0.46% | 2.44% | 0.26% |
| Q4 2025 | 0.95% | 0.90% | 0.46% | 2.68% | 0.29% |
| YoY Chg. (bps) | 2 | (5) | (0) | 24 | 3 |
Delinquency rates remained broadly stable YoY across most provinces in Q4 2025. The Atlantic and Prairie provinces saw the largest declines, suggesting stronger household financial resilience or regional economic recovery. Quebec's delinquency rate held steady at 1.31%, continuing to be the lowest in the country and reflecting consistently strong credit performance. Alberta was the only province to see a sizable increase, rising 8 bps YoY to 2.37%, potentially linked to sector-specific volatility or higher credit exposure.
| Ranking Consumer Total Delinquency Rate (90+ Days Past Due) on all products by Province | |||
| Q4 2024 | Q4 2025 | YoY Chg. (bps) | |
| Canada | 1.83% | 1.83% | 0 |
| AB | 2.29% | 2.37% | 8 |
| ON | 1.95% | 1.96% | 1 |
| QC | 1.31% | 1.31% | 0 |
| BC | 1.72% | 1.69% | -3 |
| PEI | 1.79% | 1.76% | -3 |
| NS | 2.00% | 1.96% | -4 |
| NB | 2.09% | 2.02% | -8 |
| SK | 2.01% | 1.93% | -8 |
| NL | 1.88% | 1.78% | -11 |
| MB | 2.13% | 1.98% | -15 |
"Stabilizing and improving delinquency rates indicate that Canadians are better at managing debt after several years of volatility," Fabian said. "These trends support greater lender confidence, encouraging increased credit availability as performance improves. They also signal strengthening consumer confidence, as households that had been struggling may now feel more secure in their financial position."
Looking Ahead
Canada's credit market is positioned for renewed expansion. Although some uncertainty persists, underlying economic conditions are improving. Easing macroeconomic conditions, stabilizing delinquency rates, rising consumer confidence and lenders' strong capital positions create a foundation for cautious but accelerating growth through 2026.
Innovation is poised to further accelerate the positive momentum of Canada's credit market. The emergence of open banking—alongside rapid FinTech growth, continued digitization, and increasing use of AI—has the potential to further expand credit access and reshape competition. Comprehensive data and analytics will continue to play a critical role by enabling lenders to identify opportunities, enhance decision-making and promote sustainable growth in a dynamic landscape.
About TransUnion® (NYSE:TRU)
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries, including Canada, where we're the credit bureau of choice for the financial services ecosystem and most of Canada's largest banks. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this by providing an actionable view of consumers, stewarded with care.
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 more information visit: www.transunion.ca
For more information or to request an interview, contact:
Contact: Katie Duffy
E-mail: [email protected]
Telephone: +1 647-772-0969
____________________
1 CreditVision™ risk score: Subprime = 300-639; Near prime = 640-719; Prime = 720-759; Prime plus = 760-799; Super prime = 800+
