TransUnion Canada has introduced the TruVision Trended Risk Score, a new credit risk assessment tool designed to enhance financial inclusion for newcomers and young Canadians. This innovative solution provides lenders with deeper insights into consumer credit behavior, enabling them to extend credit access to individuals who may have previously struggled to obtain it.
Unlike traditional credit scores, TruVision Trended Risk Score evaluates borrowing and payment patterns using over 100 proprietary variables. This data-driven approach ensures a more accurate assessment of creditworthiness, particularly for new-to-credit (NTC) consumers and young borrowers.
Empowering Newcomers and Young Borrowers
Canada’s financial landscape is evolving, with immigrants and Gen Z Canadians playing a crucial role in economic growth. According to Statistics Canada, 92% of Canada’s population growth in Q3 2024 was driven by international migration. In 2024, NTC consumers accounted for 28% of new credit cards and 22% of total credit products, with newcomers making up a significant portion of this volume.
Similarly, Gen Z Canadians (born between 1997 and 2012) have rapidly increased their credit card usage. Their overall credit balances surged to $142 billion by December 2024, reflecting a 29.5% year-over-year increase. However, higher delinquency rates among this group (0.57% for balances overdue by 90+ days) highlight the need for better risk management tools.
How TruVision Trended Risk Score Works
This new scoring model provides lenders with a holistic view of a consumer’s credit behavior, allowing them to make informed lending decisions. Key benefits include:
- Early credit insights: Helps assess credit risk based on a consumer’s initial borrowing patterns.
- Post-pandemic data integration: Uses recent financial trends to improve credit evaluation.
- Increased approval rates: Expands access to credit for individuals with limited credit history.
- Better risk assessment: Reduces uncertainty for lenders when offering financial products to young and new consumers.
A Step Forward for Financial Inclusion
By implementing innovative credit evaluation tools, TransUnion Canada is addressing a long-standing challenge in the financial sector. The TruVision Trended Risk Score not only improves access to financial services but also supports Canada’s growing economy by empowering newcomers and young Canadians with better credit opportunities.
As financial institutions adopt this cutting-edge solution, more consumers will have the chance to build strong credit profiles, leading to greater financial stability and growth. For those looking to establish themselves in Canada’s financial system, this development marks a significant step forward in achieving their economic goals.
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