Credit arrears are continuing to climb as the challenging economic conditions put pressure on households.
Data from credit bureau Centrix shows 11.9 percent of New Zealanders were in arrears in January - a four year high - with 430,000 people behind on repayments, which was an increase of 20,000 from December.
The number of households behind on mortgage repayments has risen to the highest level since April 2020, with about 18,400 mortgage accounts past their due date - up 22 percent from a year ago.
Unsecured personal loan arrears increased 9.2 percent from a year ago to the highest level since 2017, and vehicle arrears were up 5.5 percent.
Centrix managing director Keith McLaughlin said the trend in mortgage arrears was concerning.
"Unless there's a circuit breaker of some sorts then we'd expect the trend to continue.
"At the moment jobs are rich, people are employed and yet across all the areas of lending we're seeing arrears starting to spike back up again.
"If unemployment becomes an issue that will just aggravate the situation even further," McLaughlin said.
Demand for credit cards increased 21.7 percent from a year ago, while new mortgage applications fell by a quarter.
"I think a lot of it is down to people starting to use credit cards for international travel," McLaughlin said.
Business credit demand fell 13 percent, driven by a slowdown in the retail and hospitality sector amid falling discretionary spending and consumer confidence, McLaughlin said.
He said for anyone struggling with their finances and struggling to meet repayments, it was important to raise it with creditors as soon as possible.