Four in 10 Canadian Credit Card Holders Uncertain About Importance of Paying More than Minimum Due - Seite 2

  25%
  21%
  41%

"Leveraging trended data and the insights derived from it could also really help Canadian lenders better identify borrower risk trends and ultimately create greater credit access for consumers. This can only happen when financial institutions utilize trended data in real time, which is only available in Canada through TransUnion," said Skinner. "When lenders can access it broadly across the consumer wallet, it allows them to better tailor their products to consumers, which builds better loan relationships and helps everyone in the long run."

Payment Data Good Predictor of Delinquency

TransUnion utilized its Total Payment Ratio (TPR) metric to identify the correlation between payment amount and delinquency across multiple products and regions. TPR is calculated by dividing a consumer's total monthly credit payments by the total minimum due on all of the consumer's credit products. The higher the TPR, the less likely the consumer will fall behind on payments.

For instance, a person making $400 in payments on three credit cards when the aggregate minimum due on those cards was $200 would have a TPR of 2.0. A person making $1,200 in payments with an aggregate minimum due of $200 would have a TPR of 6.0. TransUnion used this metric to analyze how credit users performed on various loan types.

"Our research shows that consumers across the globe -- be it in North America or Asia -- can benefit from paying more than the minimum due," said Ezra Becker, senior vice president and head of TransUnion's global research operations. "This may sound intuitive -- consumers who are able to pay more usually have more liquidity and therefore are less likely to miss payments. But it is the quantification of this intuition that is important. This is an insight one can only derive from trended data that includes actual payment data, and it can be an important variable for lenders to use when assessing the risk of their credit portfolios."