The latest insights and trends from our credit bureau show that Australian credit customers who have missed one or more repayments rose to an almost two year high across the key forms of credit. It’s the perfect time for lenders to proactively monitor their customers’ financial health to not only protect their portfolio, but to ensure that financially vulnerable customers get the support they need as early as possible.

Our latest credit bureau data has revealed a downward trend in missed credit repayments across personal loans and credit cards but missed mortgage repayments have increased to levels not seen since the pandemic.

The data shows Australian credit customers who have missed one or more repayment rose to an almost two-year high across the key forms of credit in January 2023, before a slight reduction the following month, which coincided with the ninth consecutive cash rate rise.

The most recent analysis shows the number of Australians falling behind on their credit repayments is similar to the levels experienced in early 2020 prior to special government and financial system pandemic support measures, such as early access to superannuation, loan pauses and re-payment holidays, that led to a steep fall in delinquencies across all forms of credit.

The repayment data is used by credit bureaus including Experian to calculate Australians’ individual credit scores and the credit reports are used by lenders to support responsible decision-making. The latest available data to March 2023 shows:

  • 12% of personal loan borrowers had fallen behind with one or more of their payments, a reduction on the 5.31% high in January 2023 which was the highest level of delinquency since April 2020.
  • 74% of credit card holders in January 2023 had fallen behind on one or more of their payments, the highest level since May 2020, with delinquency rates remaining largely flat since.
  • 40% of customers had fallen behind on one or more of their mortgage repayments, an increase from 1.26% in February 2023 and the highest level since March 2020.

Despite the short-term reduction, the long-term trend and external financial pressures point to many Australians not being out of the woods yet. With the RBA raising interest rates two more times since February 2023, borrowers have now experienced 11 rate rises since May 2022, pushing even more Australians with mortgages and loans to feel the economic pinch.

However, as the financial support measures expire and cost of living pressures increase, it is important lenders continue to support customers with new hardship solutions ahead of the wave of expiring fixed-rate loans.

Director of Client Advisory, Credit Services A/NZ, Charlotte Rankin said:

“This latest data, whilst mainly positive, could be the calm before the storm. Now is the perfect time for credit providers to proactively start monitoring their customers’ financial health, not only to protect their own portfolio, but to ensure that financially vulnerable clients get the support they need as early as possible.

Hardship regulation introduced in July 2022 means that an industry framework is in place to manage the increased rates of hardship expected for the year ahead, while also safeguarding consumers against any financial hardship arrangements impacting credit scores.

This not only helps protect their loan portfolio, but proactive assessment shows genuine care for customers allowing lenders to identify and assist those who may be financially vulnerable and at risk of facing hardship.

This is no surprise for lenders, with 100% of risk experts surveyed as part of Experian’s latest Risk Radar report stating it’s likely or very likely that customers will experience increased levels of hardship and defaults in the next 12 months.”

Senior Manager, Financial Assistance at Great Southern Bank, Annie Brett added:

“There has been an increase in the proportion of financial assistance requests coming from customers who are feeling overcommitted. This is quite a different scenario to the peak of the COVID-19 pandemic, when the most common reasons people required financial assistance were becoming unemployed, facing reduced work hours or due to illness.

We encourage borrowers to reach out to their bank as soon as possible if they are concerned about their ability to meet an upcoming loan repayment, so options can be explored early.

At Great Southern Bank, we recognise there is no one-size-fits-all approach to financial assistance. We work with customers to find tailored solutions to their specific financial situation which can range from job loss to family changes, or even natural disasters. It’s important we work together to determine what type of support may be needed for each unique scenario.

Often customers need other social support, in addition to financial assistance, to help them get back on their feet. That’s why we work with a community partner to offer free independent financial advice, family violence support and other services by trained experts, looking at the customer’s holistic situation.”

If you’d like to better understand how the cost-of-living pressures are affecting your portfolio and how Experian can help, please get in touch with us using the form below.


Contact Us

Thank you for your enquiry.

We will be in contact shortly.