The early signs of improvement in household finances are starting to show and the number of people struggling is peaking, according to a credit bureau.

Centrix managing director Keith McLaughlin told Nine to Noon the number of people seeking assistance because they were struggling to meet mortgage payments had likely peaked.

"[That] will put more money into the household budget and make things more affordable, so I think we're probably at the peak now and I would expect that they will start to drop away."

The high number of people having trouble in the mortgage sector was a flow on impact from the past 18 months, he said.

But lenders were now better at working with borrowers to find a flexible solution to see them through, rather than simply opting for a mortgagee sale as they would have done a decade ago, McLaughlin said.

"We've been through a very difficult period, and I think everybody knows that.

"We knew that households were struggling, and I think when you get to the situation where it's either a mortgagee sale or a renegotiation with a lender, it's quite good to see that there is a strong communication link between the borrower and the lender to try and resolve the issue without going down the path of perhaps a mortgagee sale."

McLaughlin said those struggling financially had cut back on discretionary spending, so buy now pay later services, credit card debt and car loans weren't really an issue.

Rather essentials like power bills, rates and mortgages were where people had been falling behind.

"The trend certainly is downward as far as the arrears is concerned, and that of course will flow into the defaults and into the hardships and any potential mortgagee sales.

"We are seeing the early signs of improvement in household finances," he said.

-RNZ.