Global Credit Trends for Q3 2024

THE EQUIFAX TEAM OF GLOBAL EXPERTS PROVIDES INSIGHTS INTO THE LATEST GLOBAL CREDIT TRENDS, revealing shifts in inflation, loan access, and financial security worldwide. 
 

HERE ARE THE THREE TOP GLOBAL CONSUMER CREDIT TRENDS OF Q3 2024:
 

Easing Inflation Brings Relief and Reshapes Credit Policies
 

Globally, inflation is easing, prompting central banks to adjust their policies to foster economic stability. In the United States, the Federal Reserve reduced interest rates by 50 basis points as inflation reached the 2% target, making loans and mortgages more affordable. Canada’s interest rates fell by 125 basis points between June and October, while the UK and Brazil also implemented reductions to stimulate recovery. Australia held rates steady at 4.35% for much of the year to target underlying inflation of 3.5%, despite headline inflation declining to 2.8% in the September quarter.

Disparities in Credit Access and Rising Debt Challenges
 

The United States is still in the midst of a K shaped economic recovery. The “K” shaped economy describes an economic recovery where different segments of the population 

recover at drastically different rates. From 2021 to the present, mortgage holders saw a 9% improvement in debt-to-income ratios, yet non-mortgage debt surged by 28%. Younger, urban families experienced a 21.8% rise in delinquent payments, which could suggest increasing financial pressures over the last three years. In the UK, 8.5% of credit seekers had no active credit history, and another 16% had minimal credit experience, such as only utilities or current accounts, which could limit their access to borrowing options.

AI and Analytics Combat Loan Fraud
 

In Canada, loan fraud has become a significant challenge in the auto industry, with a sharp rise over the past 18 months. Notably, 40% of identity fraud victims are high-credit-score individuals (800+). At the same time, economic pressures have driven younger consumers with lower credit scores to engage in "first-party fraud," such as falsifying income or financial data to secure auto loans. Tight credit conditions, high vehicle prices, and elevated borrowing costs have amplified these risks, while fraudsters increasingly use stolen data to impersonate individuals or create synthetic identities.

Equifax recognizes that fraud can occur at any point in the customer journey, and it’s getting harder and harder to detect as tactics become increasingly more sophisticated and more people interact with companies exclusively online. Lenders might consider using advanced analytics and AI-powered tools to enhance security, while consumers can take steps such as proactively monitoring their credit card accounts, sign up for fraud alerts when possible, watch out for phishing and smishing scams and avoid using unsecured websites. 

Consumers should also regularly check their credit reports and can review their Equifax credit report online free of charge via myEquifax or request their credit report through AnnualCreditReport.com. Consumers can also order credit reports by phone at (877) 322-8228 or by mail at the address below.

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Your Equifax credit report will be mailed to you within 15 days.

As credit markets evolve, understanding these trends is critical for navigating financial challenges and opportunities alike. 

Explore additional global credit and financial data insights for the first half of 2024 here.