Transunion · NYSE:TRU

Transunion — 2024 US Financial Services Summit

43 slides from Transunion's conference presentation, 2024

Slide 1: Solving for Gen Z
Solving for Gen Z Michele Raneri VP, Financial Services, Research and Consulting
Slide 3: Interviews, Surveys and Credit Data methodology
Interviews Surveys ❑ Gen Z only ❑ Over 1,200 consumers ❑ Remote ❑ In person ❑ Gen Z asked about today ❑ California ❑ Millennials asked about 10 years ago ❑ Connecticut ❑ North Carolina ❑ February 2024 Z ❑ Texas ❑ UK (using US credit) ❑ February-March 2024 Credit Data ❑ Gen Z 22-24 Year olds December
Slide 4: Study focused on 22-24 year olds at different time periods
The study honed in on 22-24 year olds at different time periods to level the comparison between the two generation groups Full generation Timeframe for age range Focus comparison Generation as Of 2023 Q4 age range analysis Millennials 30 – 44 22 – 24 Q4 2013 M (-10) Gen Z 12 – 29 22 – 24 Q4 2023 Z ©
Slide 5: Interviews with Gen Z
Interviews with Gen Z ❑ What comes to mind when you think about credit? ❑ How did you build credit? ❑ What is your credit score? © 2024 TransUnion LLC All Rights Reserved 2024 US Financial Services Summit
Slide 7: Interviews with Gen Z
Interviews with Gen Z ❑ What comes to mind when you think about credit? ❑ How did you build credit? ❑ What is your credit score? © 2024 TransUnion LLC All Rights Reserved 2024 US Financial Services Summit
Slide 9: Gen Z more impacted financially by COVID than Millennials by GFC
Survey Today’s Gen Zs said they were more impacted financially by the COVID pandemic than Millennials said they were by the Great Financial Crisis M Z (-10) 60% of Millennials said they had their 75% of Gen Z said they had their finances negatively impacted by the finances negatively impacted by the
Slide 10: Younger people developing credit want to get approved
Survey Younger people developing their credit primarily want to get approved and have an affinity to lenders Credit Card Features Ranked 2013 Q4 1 2 3 4 M 5 6 (-10) From a lender I just wanted to Points or miles Cash back No fee Interest rate Ranking that I preferred get approved 2023 Q4 1 2 3 4 Z 5
Slide 11: Trust in scores and access to credit
Survey Both groups trust their scores capture true creditworthiness, and fewer Gen Z today feel they have access to the credit they need Trust in Credit Scores Access to Credit Turned Down for Credit 2013 Q4 95% 95% 95% 2023 Q4 85% 85% 81% 85% 76% % Consumers 75% 75% 75% 63% 63% 65% 65% 65% 55% 55%
Slide 12: Gen Zs have higher scores
Credit Gen Zs have higher scores and scores Risk Tier Distribution of 22-24 Year Olds Median Score: 634 D = 31 665 Subprime Near prime Prime Prime plus Super prime 100% 2% 5% 11% 80% 22% M 24% Z Risk Tier % (-10) 60% 29% 24% 40% 21% 20% 38% 24% 0% 2013 Q4 2023 Q4 Notes: 1. VantageScore® 4.0 credit s
Slide 13: Gen Zs have not kept pace with the entire population
Credit Gen Zs have not kept pace with the increase of the entire population Population Median Score: 657 D = 56 713 Risk Tier Distribution of 22-24 Year Olds Median Score: 634 D = 31 665 Subprime Near prime Prime Prime plus Super prime 100% 2% 5% 11% 80% 22% M 24% Z Risk Tier % (-10) 60% 29% 24% 40%
Slide 14: Gen Zs have lower median scores than the population
Credit Gen Zs have lower median scores compared to the entire population Population Median Score: 657 D = 56 713 Risk Tier Distribution of 22-24 Year Olds Median Score: 634 D = 31 665 Subprime Near prime Prime Prime plus Super prime 100% 2% 5% 11% 80% 22% M 24% Z Risk Tier % (-10) 60% 29% 24% 40% 21
Slide 15: Interviews with Gen Z
Interviews with Gen Z ❑ Credit or debit? ❑ Have you had an authorized user card? ❑ What kind of credit do you use? ❑ What do you look for when shopping for credit? © 2024 TransUnion LLC All Rights Reserved 2024 US Financial Services Summit
Slide 17: Interviews with Gen Z
Interviews with Gen Z ❑ Credit or debit? ❑ Have you had an authorized user card? ❑ What kind of credit do you use? ❑ What do you look for when shopping for credit? © 2024 TransUnion LLC All Rights Reserved 2024 US Financial Services Summit
Slide 18: About 40% of young consumers use credit more than debit
Survey About 40% of young consumers use credit more often than debit and has held steady over time Credit vs. Debit 2013 Q4 2023 Q4 80% 70% M Z (-10) 59% 60% 60% % Consumers 50% 41% 40% 40% 30% 20% 10% 0% Debit Credit Do you use a credit card or a debit card more often? © 2024 TransUnion LLC All Rig
Slide 19: Authorized users: survey vs. credit file
Survey Credit Gen Z said they are authorized users on cards, but what was observed on the credit file far outpaces the survey Authorized Users: Survey vs. Credit File 2013 Q4 60% 2023 Q4 50% % Consumers 40% 31% M (-10) Z 30% 27% 20% 9.0% 10% 4.5% 0% Yes Card - Authorized Users (Survey) Are you an au
Slide 20: Most useful credit product
Survey The sentiment of Gen Zs is cards are more useful, while auto has declined Most Useful Credit Product Millennials (2013 Q4) Gen Z (2023 Q4) 45% 40% 35% % Consumers 30% 25% 20% 15% 10% 4% 4% 29% 36% 16% 14% 12% 13% 14% 10% 8% 9% 5% 0% Auto Card Private Label Personal Loan Student Loan Credit Bu
Slide 21: Product penetration for 22-24 year olds
Credit Credit card usage has increased significantly but so has auto Product Penetration for 22-24 Year Olds Millennials (2013 Q4) Gen Z (2023 Q4) 100% 90% 80% % Consumers 70% 60% 50% 40% 30% 5% 5% 20% 49% 34% 26% 44% 61% 84% 1% 25% 30% 0% 10% 0% Auto Card Private Label Personal Loan Student Loan Cr
Slide 22: Gen Z starting credit slightly later
Credit Gen Z are starting their credit experience slightly later than their counterparts 10 years ago did Average Age of Oldest Trade by Product for 22-24 Year Olds Millennials (2013 Q4) Gen Z (2023 Q4) 5.0 Average age of 4.5 M consumer 18.9 years Oldest Trade (Years) 4.0 (-10) Age of oldest trade A
Slide 23: Gen Z more delinquent on auto, cards and private label
Credit Gen Z are more delinquent on auto, credit cards and private label Consumer Level Serious Delinquency1 for 22-24 Year Olds Millennials (2013 Q4) Gen Z (2023 Q4) 8% 8.0% 7.4% 7% % Consumers 6% 5.8% 5% 4% 2.8% 3% 1.8% 1.9% 2% 1.6% 1.0% 1.2% 1% 0.4% 0% Auto Card Private Label Personal Loan Studen
Slide 24: Gen Z have come of age during a high inflation economy
Inflation (%) Macro 10% 20% 25% 30% 35% 0% 5% 15% -5% 2006 Q1 2006 Q3 U.S. Inflation 2007 Q1 2007 Q3 2008 Q1 © 2024 TransUnion LLC All Rights Reserved 2008 Q3 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 Quarter 2015 Q3 2016 Q1 2016 Q3 2017
Slide 25: 32% cumulative inflation over 10 years
Macro Gen Z have come of age during a high inflation economy, resulting in 32% cumulative inflation over 10 years U.S. Inflation 35% Cumulative Growth in CPI Inflation Rate 30% 25% Inflation (%) 20% 15% 10% 5% 0% -5% 2006 Q1 2006 Q3 2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 2010 Q1 2010 Q3 2011 Q1 201
Slide 26: Debt-to-Income comparison reflects tougher situation for Gen Z
Credit Debt-to-Income comparison reflects a tougher situation for Gen Z 22-24 Year Olds 22-24 Year Olds M 2013 Q4 Z (-10) 2013 Q4 adjusted for inflation 2023 Q4 $39,394 $51,852 Income $45,493 11.76% 11.76% DTI Including all debt 16.05% DTI Excluding Mortgage 11.24% 11.24% 15.49% & Student Loan Incom
Slide 27: Increasing balances reflect higher inflationary pressures
Credit Increasing balances reflect higher inflationary pressures on Gen Z 22-24 Year Olds 22-24 Year Olds M Z (-10) 2013 Balances 2013 Balances adjusted for inflation 2023 Balances $14,468 $19,043 Auto $21,767 $1,708 $2,248 Credit Card $2,834 $113,301 $149,130 Mortgage $215,150 $3,785 $4,981 UPL $5,
Slide 29: Tracking originations and performance over 24 months
Credit TU identified 22-24 year olds who originated1 in 2011 Q4 or 2021 Q4, and tracked their performance2 over the following 24 months 2011 Q4 2013 Q4 6.3M Consumers M 22-24 years old 1.6M (-10) t-3 Originations t t+24 2023 Q4 6.7M Consumers 2021 Q4 22-24 years old Z 1.7M t-3 Originations t t+24 Or
Slide 30: Product origination popularity among Gen Z
Credit Auto, card, personal loan, and mortgage have gained popularity among Gen Z compared to Millennials at the same age Percentage1 of Consumers by Originated Product for 22-24 Year Olds 9% Millennials (2011 Q4) Gen Z (2021 Q4) 8% % Consumers 7% 6% 5% 4% 2% 3% 0.7% 0.4% 2% 1% 8% 5% 3% 1% 4% 0% Aut
Slide 31: Creditworthiness of originating consumers
Credit Creditworthiness of originating consumers has generally increased for Gen Z, except in the case of bankcard where it has been flat Risk Distribution2 by Product Origination for 22-24 Year Olds Subprime Near prime Prime Prime plus Superprime 120% 657 675 677 675 695 712 598 619 100% 2% 0% 1% 3
Slide 32: Gen Z perform worse on auto, card and personal loan
Credit Gen Z perform worse than their historical counterparts on their auto, card and personal loan obligations Account Level Serious Delinquency for Originations 24 Months Prior by 22-24 Year Olds 15% Millennials Gen Z 15% Millennials Gen Z Delinquency Delinquency Rate (%) Rate (%) Auto Card 10% 10
Slide 33: Segmentation analysis of Gen Zs
Segmentation analysis was performed to discern lower risk from higher risk Data Evaluated: Gen Zs • VantageScore® 4.0 • TruVision attributes – Trended attributes – Liquidity attributes © 2024 TransUnion LLC All Rights Reserved
Slide 34: Key attributes that separate risk for new cards
Credit Key attributes that separate risk for new cards includes utilization, balances, total monthly obligations, and AEP Card Prime Performance (90+ DPD) Overall Bad Rate: 8% (100%) Number of instances revolving trade utilization Number of instances revolving trade utilization exceeded 50% in 12 mo
Slide 35: Key attributes that separate risk for new cards
Credit Key attributes that separate risk for new cards includes utilization, balances, total monthly obligations, and AEP Card Prime Performance (90+ DPD) Overall Bad Rate: 8% (100%) • Lower occurrences of 50% utilization • Higher occurrences of 50% utilization • Longer credit history • Higher balan
Slide 36: Interviews with Gen Z
Interviews with Gen Z ❑ How stressed are you about credit (1-10)? ❑ How confident are you that you understand credit (1-10)? ❑ Where did you learn about credit? © 2024 TransUnion LLC All Rights Reserved 2024 US Financial Services Summit
Slide 38: Interviews with Gen Z
Interviews with Gen Z ❑ How stressed are you about credit (1-10)? ❑ How confident are you that you understand credit (1-10)? ❑ Where did you learn about credit? © 2024 TransUnion LLC All Rights Reserved 2024 US Financial Services Summit
Slide 39: Gen Z more stressed and less confident about credit
Survey Gen Z consumers perceive themselves as more stressed and less confident about credit Attitude towards Credit 40% Millennials (2013 Q4) Gen Z (2023 Q4) 35% 29% 30% 30% M Z 30% (-10) % Consumers 26% 25% 21% 23% 20% 14% 15% 13% 10% 8% 8% 5% 0% Extremely Stressed Stressed Out Not Worried Confiden
Slide 40: Gen Z sees opportunity in credit but isn't fully confident
Gen Z sees opportunity in credit but isn’t completely confident in how to use credit Interviews ❑ See credit useful and important ❑ Generally positive ❑ Can be stressful ❑ Not always confident in how to use it ❑ Want more education ❑ Use authorized user cards ❑ Use credit and debit cards © 2024 Tran
Slide 41: Gen Z want additional credit but are turned down more
Gen Z want additional credit but are turned down more Interviews Survey ❑ See credit useful and important ❑ Believe their credit scores ❑ Generally positive ❑ Loyal to lenders ❑ Can be stressful ❑ Just want to get approved for credit ❑ Not always confident in how to use it ❑ Was more negatively fina
Slide 42: Gen Z later to start credit with higher balances and DTI
Gen Z are later to start credit and they have higher balances, higher debt-to-income, and worse performance compared to Millennials Interviews Survey Credit Data ❑ See credit useful and important ❑ Believe their credit scores ❑ Gen Z starting to use credit little ❑ Generally positive ❑ Loyal to lend

TransUnion — 2024 US Financial Services Summit on 6ix

Transunion — 2024 US Financial Services Summit

Slide 1: Solving for Gen Z

Slide 2: Z © 2024 TransUnion LLC All Rights Reserved

Slide 3: Interviews, Surveys and Credit Data methodology

Slide 4: Study focused on 22-24 year olds at different time periods

Slide 5: Interviews with Gen Z

Slide 6: Video: GENZ 1

Slide 7: Interviews with Gen Z

Slide 8: How does Gen Z feel about credit?

Slide 9: Gen Z more impacted financially by COVID than Millennials by GFC

Slide 10: Younger people developing credit want to get approved

Slide 11: Trust in scores and access to credit

Slide 12: Gen Zs have higher scores

Slide 13: Gen Zs have not kept pace with the entire population

Slide 14: Gen Zs have lower median scores than the population

Slide 15: Interviews with Gen Z

Slide 16: Video: GENZ 2

Slide 17: Interviews with Gen Z

Slide 18: About 40% of young consumers use credit more than debit

Slide 19: Authorized users: survey vs. credit file

Slide 20: Most useful credit product

Slide 21: Product penetration for 22-24 year olds

Slide 22: Gen Z starting credit slightly later

Slide 23: Gen Z more delinquent on auto, cards and private label

Slide 24: Gen Z have come of age during a high inflation economy

Slide 25: 32% cumulative inflation over 10 years

Slide 26: Debt-to-Income comparison reflects tougher situation for Gen Z

Slide 27: Increasing balances reflect higher inflationary pressures

Slide 28: Origination and Performance

Slide 29: Tracking originations and performance over 24 months

Slide 30: Product origination popularity among Gen Z

Slide 31: Creditworthiness of originating consumers

Slide 32: Gen Z perform worse on auto, card and personal loan

Slide 33: Segmentation analysis of Gen Zs

Slide 34: Key attributes that separate risk for new cards

Slide 35: Key attributes that separate risk for new cards

Slide 36: Interviews with Gen Z

Slide 37: Video: GENZ 3

Slide 38: Interviews with Gen Z

Slide 39: Gen Z more stressed and less confident about credit

Slide 40: Gen Z sees opportunity in credit but isn't fully confident

Slide 41: Gen Z want additional credit but are turned down more

Slide 42: Gen Z later to start credit with higher balances and DTI

Slide 43: Z © 2024 TransUnion LLC All Rights Reserved