Consumer credit demand rose in November as households looked to take advantage of retail sales leading up to Christmas.
Data from credit bureau Centrix showed demand rose 8 percent year-on-year in November, driven by credit cards (up 11.8 percent) and buy-now-pay-later products (up 7.1 percent).
Mortgage demand and car loans fell 7.7 and 4.2 percent respectively.
Credit arrears were slightly higher as households continued to face pressure from higher inflation and interest rates.
Consumer arrears rose 6.1 percent in the year ended October, with 11.8 percent of the credit active population in arrears, up from 11.7 percent in September.
Centrix said the 431,000 people were behind on their repayments, up from 427,000 a month earlier.
Arrears were tracking close to pre-Covid levels after falling to historic lows during the Covid pandemic.
It said 156,000 consumers were more than 30 days past due, while 103,000 were more than 60 days behind, and 83,000 were more than 90 days past due.
Mortgage arrears also rose slightly, with nearly 1.3 percent of home loans in arrears in October, compared to 1.25 percent in September.
Centrix chief operating officer Monika Lacey said while it was a small increase, it was not without concern.
"The concern is really the trend. Ultimately the mortgage arrears level is still really low," she said.
"If you look back at the GFC [global financial crisis of 2007-08] the numbers were much higher, so we're nowhere near that point."
Meanwhile, company liquidations rose 36 percent year-on-year in October, down from an annual rate of 40 percent in September, driven by retail and construction sectors.
"Businesses are doing it really tough out there, especially the smaller businesses," Lacey said.
"The cost of doing business has increased and the cost of funding has increased. A lot of these small business owners will be using their own personal homes as security or using a mortgage to fund their business."