More Gen Zs See Credit as Essential for Reaching Their Goals – TransUnion

• • A Shifting Mindset: Credit as a Financial Tool

• • TransUnion Study: Appetite Holds Steady Despite Challenges

• • Demand Skews the Young: Millennials & Gen Z Lead the Way

• • Unsecured Credit Still Dominates

• • Refinancing Interest Remains — But With Caution

• • Hesitation Still Runs High

• • How Lenders & FinTech Could Do Better

A Shifting Mindset on Credit

Credit is no longer viewed as a last resort for emergencies. According to a recent TransUnion study, nearly six in ten Filipinos (59%) now consider access to credit as critical to achieving their financial goals. Among Gen Z, that figure jumps even higher: seven in ten young adults see credit as a stepping stone to their dreams—whether that’s starting a business, buying their first home, or funding advanced education.

This signals a big cultural shift. For decades, many Filipinos shied away from loans or credit cards due to fear of debt traps. But as financial literacy improves and digital lending becomes more accessible, credit is increasingly being seen as a tool for empowerment, not just a burden.

Recent data from TransUnion’s Credit Perception Index (CPI 2025) and its “Consumer Pulse” studies show that attitudes toward credit are shifting, especially among younger generations.

In this article, we’ll unpack what Filipinos now think about credit, the kinds of financial products they prefer, the barriers holding them back, and what all this means for someone like you who’s trying to navigate credit responsibly.

What the Numbers Say: Perceptions, Plans, Preferences

In TransUnion Philippines’ Consumer Pulse Study Q4 2024, 64% of consumers said access to credit is very important to achieving their financial goals.
transunion.ph

Among Gen Z, the number is even higher—68% view credit access as crucial. These are not one-time spikes. Across multiple studies like the CPI 2025, knowledge about credit products (personal loans, mobile loans, BNPL) has improved—awareness is growing year-on-year.

A steady appetite for applying or refinancing

About 53–54% of consumers plan to apply for new credit or refinance existing credit in the next year. This is especially true for Millennials and Gen Z.

However, only about 38% feel they currently have sufficient access to credit and lending products. This shows a gap between desire and available options.

Unsecured credit leads

The top choices remain personal loans, credit cards, and Buy Now, Pay Later (BNPL) services—products that don’t require collateral. These lead over secured products like mortgages or auto loans.

BNPL and credit card awareness and favorability are increasing; many younger Filipinos lean toward these because of convenience and flexibility.

What’s Behind the Shift & What Still Holds People Back

Gen Z and Millennials are driving the changes. In CPI 2024-2025, Gen Z’s CPI score jumped significantly—reflecting increased awareness, interest, and more favorable attitudes toward credit.

These groups expect digital-first experiences, simple application processes, faster approvals, and transparency. Old-school bank queues, piles of paperwork, and unclear terms are no longer acceptable.

Refinancing interest with caution

Many households are open to refinancing existing credit, but enthusiasm wanes when the expected savings are small or when the terms aren’t clearly better. Some Filipinos report little benefit when payment reductions are modest. (While not always deeply quantified, TransUnion notes concern about the limited value in some refinancing offers.)

Hesitation remains high

Nearly 4 in 10 surveyed individuals considered applying for credit but ultimately decided not to. The reasons cited typically include concerns about costs, fear of being unable to repay, or lack of clarity about terms.

For many, the obstacle isn’t lack of interest—it’s fear and uncertainty. Whether it’s high interest rates, hidden fees, or complicated application processes, these are real deal breakers.

Affordability & friction are major barriers

Cost is consistently named among the top deterrents: high interest rates, service fees, and unpredictable costs make people pause.

Employment status matters: people with irregular income or contractual jobs are more risk-averse because their cash flow can be uncertain.

Alternative funding sources (personal savings, help from family/friends) are often preferred by those who hesitate to use formal credit.

Friction in the process also weighs heavily: long waits, piles of requirements, complex forms, and vague terms discourage many. TransUnion reports that speed of approval and clarity of application requirements are among the factors people prioritize when choosing credit products.

So What Does This Mean for You (the Borrower)?

1. 1. Credit can be a powerful bridge
      Rather than seeing credit as risky or something only for emergencies, many Filipinos now view it as a tool to leap forward—when used with care. If you’re planning a big purchase, need capital for business, or want to manage cash flow until payday, credit—especially the right kind—can make things possible.

1. 1. Know what you want before you choose
      Unsecured credit is fast and handy, but it often comes with higher costs. If you’re considering refinancing, ask: “How much will my payments reduce? Will I pay more interest overall? Are fees hidden?”

1. 1. Prioritize lenders and products with low friction
      Look for products that offer:

• • Clear, transparent terms

• • Mobile or online applications

• • Fast decisions

• • Minimal paperwork

These features are no longer luxuries—they’re becoming expectations, especially for younger borrowers.

4. 4. Build up your credit knowledge
      You don’t need to be an expert, but understanding basic terms like APR, credit score, payment schedules, and any fees matters a lot. It helps you avoid surprises and prevents debt from becoming overwhelming.

How Lenders & Fintech Firms Could Do Better

We also see from the data what makes a credit provider stand out:

• • Simplify application flows—streamline verification, accept digital documents, shorten waiting times.

• • Use transparent pricing—show total costs, monthly fees, APRs, late fee penalties.

• • Offer meaningful refinancing options—not just marginal savings, but real payoff terms.

• • Provide education and support resources (like calculators, quick guides, FAQs).

• • Design with digital natives in mind—mobile-friendly apps, intuitive interfaces.

Credit Kaagapay’s View: Walking With You

At Credit Kaagapay, we believe that this shift in credit perception is full of opportunity—but also responsibility. We’re committed to being more than just another credit platform; we want to be a trustworthy guide:

• • Educating you on what’s legit, what’s helpful, and what to watch out for

• • Providing tools like calculators, checklists, and tips so you can make smart decisions

• • Advocating for transparency and fairness in credit offerings

Because credit should help you reach your goals—not weigh you down.

What You Can Do Right Now

• • Check your credit score and your credit history. Know where you stand.

• • Estimate borrowing costs with a loan simulator or calculator before applying.

• • Compare lenders—look for clear terms, reasonable interest, good reputation.

• • Be wary of anything that seems too good to be true: hidden fees, guaranteed approvals without checks, vague repayment terms.

Credit is changing in the Philippines. People are starting to see it for what it can be: a tool. But like all tools, it’s how you use it—and who you trust to help you use it—that determines the outcome.

Let this be your year to use credit wisely. At Credit Kaagapay, we’re here to help you make those wise choices. Download the Credit Kaagapay app now for more financial clarity.

References:

• • TransUnion Philippines, Credit Perception Index 2025

• • TransUnion Philippines, Consumer Pulse Study Q4 2024

• • TransUnion Philippines, Consumer Pulse Study Q2 2024