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National survey from Experian follows earlier report that “millennials have the lowest credit scores of all generations”(1)
Costa Mesa, Calif., November 3, 2015 — Experian announced today the first of two reports originating from a survey of more than 1,000 millennials, ages 19-34, about a variety of personal finance topics – from their future views, to loan status, to credit knowledge, to use of technology. The survey follows a July 2015 report from Experian that analyzed credit bureau data and placed millennials last in generational credit score rankings.
Topline survey results include:
• Millennials have conflicted feelings about their personal finances; they are uncertain but lean toward optimism
• A surprising number lack knowledge about credit – or show apathy toward it
• A majority have had their credit, loan or lease attempts impacted – positively or negatively – by credit scores
• Millennials embrace technology and are quick to try new offerings – at the expense of loyalty
“Millennials are coming of financial age at a very unique time,” said Guy Abramo, President, Experian Consumer Services. “They’ve experienced a recession and the explosive advancement of personal technology. As a result, they’ve developed different views toward managing money, using credit and how they expect financial services to be delivered. The survey also showed that millennials will abandon loyalty for better products and services, which is something the entire financial services sector should consider; the pressure is on to keep innovating.”
Perception vs Reality:
• Millennials miss the mark when estimating their generation’s average credit score (654 [est.] vs. 625 [actual]), average debt $26,610 [est.] vs. $52,210 [actual], and average debt, excluding mortgage ($12,580 [est.] vs. $26,485 [actual]). 1
1. Compared to information from Experian study of millennial data, based on VantageScore.
• Despite being associated most closely with student loan debt, credit card debt takes first position as the most common millennial debt (38%), followed closely by student loans (36%). Others, in descending order, are: auto loans (28%), home loans (20%), personal loans (17%) and “other” (14%).
Pushing the edge of personal finance:
• The majority of millennials (57%) use financial mobile apps to manage their finances
• Millennials have, on average, three financial apps on their phones
• Most (57%) millennials are willing to use alternative companies/services that innovate to better meet their needs
• A significant number of millennials (39%) are familiar with “non-bank” lenders (e.g., Prosper, Lending Tree, Upstart) and 13% have already used such a service
• Nearly half (47%) will likely use alternative lenders in the future, citing easier application process, not dependent solely on credit score, more accessible, faster review process and digital savvy
Loyalty to a financial brand is a tough sell:
• Many millennials (46%) look for new financial companies/services that better meet their needs
• More than 3 out of 4 millennials will switch financial accounts if they find a better alternative
• Most frequently mentioned reasons to switch include: better interest rates (47%), better reward programs (43%), better identity protection (32%) and better customer service (35%), among others
Credit knowledge deficit:
• Most millennials feel confident of their credit knowledge (71%); however, 32% don’t know their credit scores and 67% have questions as to how their scores are created
• Among those who check their reports less than every three months, reasons for not checking reports and scores include: not necessary (35%/37%), afraid it will hurt their scores (24%/22%), unsure how to check their credit reports/scores (19%/18%)
• Millennials are very aware of how credit scores impact them; nearly 3 in 4 had a lending or leasing experience helped or hurt by their credit scores
Youthful angst, but optimism prevails:
• Despite most having a handle on their finances (73%), more than half feel that they are “going it alone” (59%) and that “the odds are stacked against them” (57%)
• Top financial future concerns are supporting a family (30%), retirement savings (28%) and financial independence (25%)
• Nearly 3 out of every 4 survey participants had their loan, credit or rental applications impacted – positively or negatively – by their credit scores
• Despite the concerns, 83% of respondents said being debt-free is an attainable goal; 71% feel confident about their financial futures
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About the survey
The online survey was commissioned by Experian Consumer Services, produced by research firm Edelman Berland which conducted a national online survey of 1002 millennials (ages 19-34) from August 14, 2015 through August 19, 2015. The research objective was to garner mediagenic data around millennials’ perceived financial situation and credit score to compare against and expand upon existing Experian data. The margin of error is plus or minus 3.1 percent overall.
About Experian Consumer Services
The Experian Consumer Services division provides credit monitoring and other informational products, such as identity protection, to millions of consumers via the Internet. The organization enables consumers to monitor their credit reports online, check their FICO® Scores and protect against identity theft. Its products include Experian Credit TrackerSM and ProtectMyID®.
Experian Consumer Services has established integrated, co-branded relationships with leading online financial destinations that provide consumers with a broad range of comprehensive online financial products and information essential to managing one’s financial life. For more information, visit http://www.experian.com.
This press release is provided for general guidance and information. It is not intended as, nor should it be construed to be legal, financial or other professional advice. Please consult with your attorney or financial adviser to discuss any legal issues or financial issues involved with credit decisions.
We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. We also help people to check their credit report and credit score, and protect against identity theft. In 2015, we were named by Forbes magazine as one of the “World’s Most Innovative Companies.”
We employ approximately 17,000 people in 38 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2015, was US$4.8 billion.
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