Last updated on August 10th, 2023
TransUnion, one of the nation’s primary credit bureaus, is predicting greater access to credit cards and loans in 2021. The indication came from the credit bureau’s annual consumer credit forecast. Here are the main talking points from the TransUnion forecast – and why the bureau has optimism for 2021.
2020 Saw A Dramatic New Credit Decline
The coronavirus pandemic has had a dramatic impact on the U.S. economy and personal finances. This effect includes a dramatic drop in the availability of new credit.
The summer saw a decline in consumer lending. Banks and credit card lenders showed less willingness to approve new applicants for credit cards, personal loans, and mortgages. With the loss of millions of jobs, businesses forced to shutter, and high numbers of coronavirus infections and related deaths, banks understandably tightened restrictions over whom to approve for credit or a loan.
TransUnion Consumer Credit Forecast Details
Despite the somber statistics from 2020, TransUnion predicts an impressive rebound in the early months of 2021. The credit bureau expects growth in new credit originations in the first half of the new year. It also foresees a noticeable jump in Q2 2021.
In its annual consumer credit forecast, TransUnion predicts 13.13 million new credit cards in Q2 2021, up from 8.59 million in the same quarter of 2020. The credit bureau also forecasts approximately 12.52 million new credit card accounts in Q1 of 2021. This figure is down from 15.52 million at the start of 2020.
The Q1 expectations are significantly lower than the actual data from Q1 2020. However, those previous figures come from a pre-COVID landscape. Both TransUnion estimates show the U.S. economy’s potential, which continues its recovery from the depths of the early pandemic months.
“Forecasting Robust Origination Activity”
Speaking in a release that accompanies the forecast, Matt Komos, VP of research and consulting at TransUnion, highlighted the optimism for continual economic recovery:
“The re-opening of America and the expected addition of more jobs and increased wages will make the greatest impact in how consumers are able to manage their debts in 2021. We are forecasting robust origination activity, and barring any unforeseen shocks to the economy, we anticipate this growth will commence at the beginning of the second quarter of 2021 for most credit products. Our forecast also sees a greater percentage of new loans going to lower risk consumers, which we believe will benefit the overall serious delinquency picture.”
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