The U.S. consumer credit market is increasingly splitting into two distinct paths, according to TransUnion's latest Credit Industry Insights Report for the first quarter of 2026. On one side, a growing number of borrowers are climbing into the highest credit tier, while on the other, those with lower credit scores are taking on more debt relative to their income, signaling emerging financial strain.
TransUnion's data shows that the number of super-prime borrowers—those with the strongest credit profiles—expanded by 15 million between late 2019 and late 2025. Meanwhile, near-prime and subprime consumers have seen their debt-to-income ratios climb, indicating that their debt loads are growing faster than their earnings. This divergence is evident across mortgages, credit cards, and personal loans, reinforcing what analysts describe as a K-shaped economic recovery.
Michele Raneri, head of U.S. research and consulting at TransUnion, noted that stress levels among lower-tier borrowers are higher now than in 2019. According to National Mortgage News, near-prime borrowers saw their back-end DTI ratios jump by 220 basis points to 21%, while subprime DTI ratios rose 210 basis points to 17.7%. Non-mortgage debt burdens also increased: near-prime non-mortgage DTI reached 16.5% in late 2025, up from 14.7% six years earlier, and subprime rose to 14.3% from 12.8%. In contrast, super-prime non-mortgage DTI remained nearly flat at 5.4% versus 5.1%.
Credit card balances continue to be a key stress point. TransUnion reported that bankcard balances climbed 4.6% year-over-year to $1.12 trillion in the first quarter. The share of borrowers 90 days or more past due increased by 10 basis points to 2.53%. Paul Siegfried, senior vice president at TransUnion, attributed the relatively modest rise in delinquencies to smaller credit limits on new accounts, which may be limiting further deterioration.
Personal loan activity reached new highs, with 7.6 million originations in the fourth quarter, a 21.7% increase from the prior year. Outstanding balances grew to $277 billion in the first quarter. Josh Turnbull, senior vice president for consumer lending, described the growth as more targeted, with lenders issuing smaller balances and maintaining stricter checks on subprime customers.
The mortgage market showed mixed signals. Originations rose 12.8% to 1.39 million in the fourth quarter, fueled by a 90% spike in rate-and-term refinancing. However, the share of mortgages at least 60 days delinquent edged up to 1.57%. Satyan Merchant, senior vice president for automotive and mortgage, cautioned that expected rate increases in early 2026 could dampen activity.
Despite tighter lending standards, riskier borrowers have not been completely shut out. TransUnion data shows that banks' subprime card originations increased by 220 basis points between Q3 2019 and Q3 2025, with deep-subprime rising 320 basis points. However, the disparity in credit lines remains stark: super-prime accounts opened with an average limit of $12,511, while deep subprime accounts averaged just $678 and high subprime $1,034.
The report comes just two days after TransUnion posted first-quarter revenue of $1.25 billion, a 14% increase year-over-year, and raised its 2026 outlook following new deals, including a majority stake in Trans Union de Mexico. CEO Chris Cartwright called it a strong quarter of outperformance but acknowledged market uncertainty. Sandpiper Investment Research upgraded TransUnion to a strong buy on Seeking Alpha, citing organic growth, the Mexico acquisition, and a 24% jump in U.S. Financial Services revenue, with mortgage revenue up 50% for the quarter.
While the data does not yet signal an imminent credit crisis—DTI ratios remain below the traditional 28/36 mortgage threshold—the widening gap between high-credit and low-credit borrowers is a concern. If inflation persists, rates stay elevated, or the job market weakens, lower-tier borrowers may have little room to absorb further shocks.
