Experian® was out Thursday with a new study of credit data for 60 million millennials that found only 39% of those without a mortgage have a prime or better score, and the majority are facing higher delinquency rates.
"Often, young people start their credit journey with a couple of mistakes first, but in the end, these mistakes create opportunities to learn how to use and build credit responsibly," said Rod Griffin, director of consumer education and awareness at Experian. "We believe everyone deserves access to quality credit and homeownership. This study presents clear areas of opportunity for millennials as they age and prepare to enter the mortgage market."
The study found:
- In the U.S., the average consumer VantageScore® is 677 and credit scores generally become more prime (661-780) as people age. Younger millennials (age 22-28) have an average near prime score of 652 with older millennials (age 29-35) at the prime score of 665.
- Millennials without a mortgage have an average age of 28, income of $33,000, 623 VantageScore and eight trades on file. Of them, 39% are viewed as prime or better (661 or higher).
- Personal loan originations are dominated by older generations. Over the last four years, millennials account for 21% of all new personal loan dollars with a 40% increase in balances since 2011.
- Younger millennials have an average per loan balance of approximately $7,300 while older millennials have an average balance of approximately $11,700.
- Nationally, delinquency rates on personal loans are on the decline at 1.32%. Millennial delinquency rates as of 4Q17 stand at 2.08% for younger millennials and 1.51% for older millennials.
- As of the fourth quarter in 2017, millennials account for 20% of new bankcard dollars. On average, younger millennials carry a balance of just under $3,000 with older millennials carrying approximately $7,500. Millennial bankcard delinquency rates are higher than the U.S. average of 1.54% at 2.33% for younger millennials and 2.18% for older millennials.
In the last quarter of 2017, millennials accounted for 23% of newly originated mortgage dollars. On average, millennial home buyers are 31 years old with an income of $64,000. The average mortgage balance for younger millennials is $167,000 and $210,000 for older millennials.
When it comes to credit scores, 77% of millennials with a mortgage have a 661 VantageScore or greater with an average score of 716 and 16 trades on file. Geographically, millennial home buyers are most prevalent in the south and west regions where 34% of the millennial population have a mortgage.