By Alison Heiler
In my work with credit unions, I find many are managing a changing lending environment as borrowers with traditionally higher-risk credit profiles represent a growing share of new originations. Meanwhile, loan amounts and credit limits continue to increase across several lending categories, including auto, credit card and consumer finance, according to the July 2026 Equifax Credit Trends report.
For credit unions, these trends create both opportunities and challenges. Institutions remain focused on providing members with access to affordable credit, but doing so effectively requires a clear understanding of how borrower profiles and portfolio dynamics are evolving.
The Equifax Credit Trends report points to five signals credit union leaders should be watching as they plan their lending strategies.
1. Higher-Risk Borrowers Represent a Growing Share of Originations
The mix of borrowers entering the credit market is changing across several major lending categories.
Through April 2026, subprime auto loan originations increased 9.0% year-over-year, while subprime bankcard originations increased 15.4%. Subprime consumer finance loan originations increased 14.1%, and consumers with subprime credit scores accounted for 43.4% of consumer finance installment loan originations.
The shift is also visible in the overall composition of new lending. Subprime borrowers accounted for 20% of auto loan originations through April 2026, compared with 18.2% during the same period last year. In bankcards, subprime consumers represented 22.2% of new accounts, compared with 20.3% the year prior.
For credit unions, the takeaway is not that higher-risk borrowers should be treated as a single category. Rather, a changing borrower mix reinforces the importance of understanding the financial circumstances behind an applicant’s credit profile.
2. The Dollars Attached to Each Lending Decision are Growing
Likewise, according to the Equifax Credit Trends report, the average auto loan originated in April 2026 reached $32,880, up 7% year-over-year. The average consumer finance installment loan reached $4,289, while the average credit limit on new subprime bank cards rose to $942.
Larger balances can increase the financial implications of individual lending decisions for both members and credit unions, which makes disciplined risk management particularly important.
Understanding the borrower is only one part of the equation. Institutions also need to consider the level of exposure associated with each lending decision and how that exposure fits within their broader portfolio strategy.
3. Borrower Capacity Requires More Than a Single Perspective
These trends also underscore the value of taking a broader view of financial capacity as the borrower mix evolves.
Credit scores remain an important component of credit decisioning, providing valuable insight into a consumer’s credit history and repayment behavior. At the same time, many institutions are complementing traditional credit insights with additional data that can provide context around a member’s current financial circumstances.
Verifying income and employment information at time of origination and throughout the account management process can provide that additional perspective. Rather than replacing established credit decisioning practices, complementary data sources can help credit unions develop a more complete understanding of borrower capacity and make more informed decisions.
4. Timely Data Can Provide Important Context for a Changing Market
The pace at which consumers’ financial circumstances can change makes the timeliness of information an important consideration for lenders.
Income, employment and household financial circumstances can evolve over the life of a lending relationship. Access to reliable current information can provide additional context as credit unions evaluate applications, manage existing portfolios and assess changing risk characteristics.
This can be particularly valuable in an environment where traditional credit information and other financial indicators may capture different aspects of a consumer’s financial profile. By bringing complementary data into their lending strategies, credit unions can support more consistent decision-making while maintaining a broader view of member financial health.
5. Portfolio Management is Becoming an Active Discipline
As credit unions manage larger balances and a changing pool of borrowers, portfolio management plays an important role in maintaining long-term financial health for the institution.
Because members’ financial circumstances can change after a loan is approved, credit unions need ways to better identify and understand those shifts over time.
Greater visibility into reliable income and employment data can support portfolio segmentation and ongoing risk assessment, enabling more proactive member engagement by credit unions. This helps institutions more effectively identify opportunities to apply different strategies to segmented portions of the portfolio, rather than relying on a one-size-fits-all approach. In doing so, credit unions move from simply responding to portfolio performance to taking a more informed, proactive approach to portfolio management.
Turning Signals Into Strategy
None of these trends points to a single solution for credit unions. Instead, they illustrate the value of a comprehensive approach to lending and portfolio management.
In today’s market, credit unions do not have to choose between expanding access and managing risk. By combining established credit insights with complementary, employer-provided data to better maintain visibility throughout the lending lifecycle, credit unions are better positioned to make more informed lending decisions while continuing to support their members throughout the life of their loans.
Alison Heller is sales director, consumer finance at Equifax.
