Gen Z is becoming the fastest-growing segment of Canada’s credit market as more young adults begin building credit profiles and taking on larger borrowing commitments. At the same time, broader signs suggest consumer credit stress may be starting to level off after a period of rising delinquencies.
BNN Bloomberg spoke with Matt Fabian, senior director of financial services research and consulting at TransUnion Canada, about how Gen Z borrowing compares with previous generations, why younger consumers are using credit differently, and what improving economic conditions could mean for repayment trends.
Key Takeaways
- Gen Z is the fastest-growing group of credit-active consumers as more young Canadians enter the credit market and expand into larger borrowing products.
- Compared with millennials at the same life stage, Gen Z appears to be using less credit and carrying lower balances, reflecting greater financial research and digital engagement.
- While Gen Z has the highest delinquency rates among generations, payment performance is improving as borrowers gain experience managing credit.
- Credit card debt is typically where financial stress first appears, while borrowers generally prioritize keeping mortgage and other secured loan payments current.
- A stronger labour market could further improve repayment performance by supporting employment and income growth for younger Canadians.
Read the full transcript below:
ROGER: Well, the Gen Z share is growing fastest among the ranks of Canadian borrowers, according to credit monitoring agency TransUnion. Gen Z is also outpacing other age groups in taking on non-mortgage debt. For more on what these trends mean, let’s bring in Matt Fabian, senior director of financial services research and consulting at TransUnion Canada. Thanks very much for joining us today. We appreciate it. They’re taking on more debt. Is it good debt, bad debt, or are they just kind of growing up? They’re getting to be adults, so to speak?
MATT: It’s the last one, really. When you think about the Gen Z cohort, it’s anywhere from 16 to 29 years old right now. The younger portion of that cohort is starting to take on the early stages of debt, so things like credit cards and personal loans. But we are starting to see, as they move through the later stages and into different life stages, they are starting to expand credit into things like lines of credit, mortgages and larger debt obligations.
ROGER: And what are they buying? Are they going beyond the normal debts? Are they doing unusual things with it, or is it the usual debt, kind of, so to speak?
MATT: I would say it’s usual in the sense that, given the life stage they’re at, it’s probably relative to where previous generations have been. The qualifying rules for mortgages restrict them a little bit based on income. They’re probably in their earlier earning years, and so they’re not going to have access to maybe larger mortgages. So it’s probably more reasonably sized mortgages. But certainly things like credit cards and lines of credit, each consumer is going to be individual based on their credit behaviours, but they would qualify for credit much like anybody else would. We’re seeing the utilization rates slightly higher for some of those products, probably because they’re also in the early life stages, and so they’re utilizing them to purchase things and, in some cases, use them as a substitute for cash flow.
ROGER: And how does it compare to previous generations at that age? Or do we have those numbers?
MATT: We do. We see a little bit of a difference from the last cohort, which would have been millennials. We’re seeing a little less engagement. We’re seeing balances slightly lower and utilization rates slightly lower, maybe more financially responsible in the sense that they’re not accessing as much credit as their predecessors. That could be because there’s just access to a lot more financial information and a lot more financial literacy. We find that this Gen Z cohort has been the first cohort that’s completely digitally native, and so there’s less loyalty among lenders as well. They do more research up front in terms of the types of products they want and how they want to utilize those products compared with previous generations.
ROGER: And that’s actually not a bad thing, though, is it?
MATT: It’s not, no. Certainly. From a lender perspective, it just means that the relationship has to be a little bit different. They’re less loyal. They’re not walking into branches. They’re doing a lot more research over their phones or digitally. From a financial responsibility perspective, we’re seeing the usual bumps. A lot of them are new to credit, and so we do see a little bit higher delinquency rates initially, but we do see that tapering off as they move through and get used to using credit.
ROGER: I was going to ask about the delinquency rates. Is it credit? Are they seeing mortgage delinquencies that are going up too? Where are the strongest pressure points?
MATT: Generally speaking, we’re seeing higher delinquency rates for this cohort. We’re seeing it in the non-mortgage products, things like credit cards. They tend to protect their mortgage. They tend to protect larger loans. When they get into these cash flow constraints, they’re probably allocating disposable income to cover those more secured debts rather than credit cards. So we see the cracks starting to emerge, when they do emerge, on the credit card side.
ROGER: And we just saw the GDP numbers. It looks like the economy is hopefully strengthening, which is a good thing. What kind of an impact might that have on Gen Z?
MATT: Certainly, an improving economy means more jobs. It means higher employment for that cohort. Employment ties directly to delinquency in a lot of cases. Where there’s more secure employment and salaries might go up, that’s only going to reinforce that generation. It’s going to reinforce the entire credit market, but certainly that generation, who are probably in their earlier earning years. Being able to shore up employment for that cohort is going to make a big difference in terms of their ability to repay debt.
ROGER: Okay. But it almost sounds like the kids are all right. We’ve got to wrap up there, but are they doing okay overall? Quick yes or no on that.
MATT: Yeah. Like every cohort, there are segments that aren’t, but generally speaking, they’re doing okay.
ROGER: All right, we’ll leave it on that note. Matt, thanks very much for joining us.
MATT: My pleasure.
ROGER: Matt Fabian, senior director of financial services research and consulting at TransUnion Canada.
---
This BNN Bloomberg summary and transcript of the June 30, 2026 interview with Matt Fabian are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
