CHICAGO — TransUnion said the U.S. consumer credit market is increasingly splitting along a “K-shaped” trajectory, with financial conditions improving for higher-credit borrowers while worsening for more vulnerable consumers.
The findings, released as part of Q1 2026 Credit Industry Insights Report (CIIR), show that while overall credit conditions remain stable, a growing divide is emerging between the least risky and most risky borrowers.
TransUnion reported that the super prime segment — the lowest-risk tier — expanded by 15 million consumers between the fourth quarter of 2019 and the fourth quarter of 2025, reflecting stronger credit profiles and improving financial health among higher-quality borrowers.
At the same time, middle-tier categories such as prime plus, prime and near-prime have declined, while subprime borrowers remain under increasing financial pressure, often carrying higher debt loads and rising debt-to-income ratios.
“The credit market has diverged over the past several years, and that divide is becoming increasingly evident in consumer risk profiles,” Jason Laky, executive vice president and head of financial services at TransUnion, said in a statement.
Affordability Challenges
Affordability challenges are contributing to that divergence. Debt levels have risen across all risk tiers since 2019, driven in part by higher everyday expenses. While super prime consumers saw the largest percentage increase in balances — up 25% — their debt-to-income ratios have grown more modestly than those of non-prime borrowers, indicating greater capacity to manage the added debt.
Non-prime consumers, particularly those in near-prime and subprime categories, have experienced the steepest increases in non-mortgage debt-to-income ratios, intensifying financial strain.
“These trends point to two very different credit environments,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion.
Riskier Borrowers Continue to Get Credit
Despite the pressures, lenders have continued to extend credit to riskier borrowers. TransUnion said the share of subprime bankcard originations rose by 220 basis points between 2019 and 2025, with the largest increases among deep subprime consumers.
At the same time, lenders are managing risk by adjusting credit line sizes. Super prime borrowers saw new bankcard credit lines increase 11.5% to $12,511 by the third quarter of 2025, while growth for subprime segments was more modest.
The report underscores a credit market moving in two directions simultaneously — continued strength among higher-credit consumers alongside growing strain among more financially vulnerable households — as lenders balance credit access with risk management in a challenging economic environment.
