Experian Millennial Credit & Finance Survey Report Part I of II

1

EDELMAN BERLAND

Experian Millennial Credit &

Finance Survey Report

Part IOctober 2015

2 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement

WHO HOW MANY ACCURACY WHEN HOW

Millennials Nationwide

(Adults age 19-34)

n=1,002 Margin of Error = +/- 3.1%

Data Collection Occurred

August 14-19, 2015

Online Survey

RESEARCH OBJECTIVE:

Research Methodology

Executive Summary


• Compared to older generations, Millennials consider themselves to be:• More Digital: They prefer to conduct their banking on mobile and like brands that utilize

new technology• More Experimental: They want to see innovation in the industry and they’re willing to try

alternative brands• Less Loyal: They are willing to switch to brands that better suits their needs, such as

providing lower interest rates, better rewards programs or more free services

• Millennials have mixed emotions about their personal finances:• They feel their finances are holding them back from their life goals like traveling the world

or buying a home• They feel less financially stable than their parents did at their age, and they worry about

being able to support a family, save enough for retirement, pay off their debt or even just become financially independent

• In the long run, however, they are optimistic and feel confident about their financial futures

• There are significant knowledge gaps with regard to Millennials and their credit:

• The majority of Millennials consider themselves to be knowledgeable about credit scores and reports, but they rarely check their credit reports and one in three does not know his or her credit score

Key Findings


Estimated (Among All Millennials)

Estimated(Among

Millennials with Any Debt)

Actual(Experian Data)

Average VantageScore® Score

654 650 625

Average Debt $26,610 $37,820 $52,120Average Debt (Excluding Mortgages)

$12,580 $17,880 $26,485

Q16. To the best of your knowledge, approximately how much debt do you currently have… (Asked if currently have any type of debt, n=705) Q21. And, to the best of your knowledge, what is your credit score?

Millennial Financial Snapshot: Perceptions vs. Reality


Credit Card Debt

Student Loan Debt

Auto Loan Debt

Home Loan Debt

Personal Loan Debt

Other Type of Debt

Currently Have 38% 36% 28% 20% 17% 14%

Average Amount $7,799 $20,87

8$12,78

2$87,85

9 $6,788 $4,284

Q15. Below is a list of different types of leases, loans and debts. Please indicate whether you currently have or have ever previously had any of the followingQ16. And, to the best of your knowledge, approximately how much debt do you currently have… (Asked if currently have; Credit card debt n=380, Student loan debt n=357, Auto loan debt n=281, Home loan debt n=204, Personal loan debt n=175, Other type of debt n=142)

Millennial Financial Snapshot: Current Debt

70%CURRENTLY CARRY DEBT

Millennials and the “New” Personal

Finance


Q4. To what extent do you agree or disagree with each of the following statements?Q47. Approximately how many financial mobile apps do you use? (Asked if use mobile device to monitor finances, n=572)

57%use financial

mobile apps to manage personal

finances

Mobile App Usage

48%use free financial

services, like Mint, to manage personal finances

Free Services Usage

They look to tech and free services to help manage their personal finances

3AVERAGE FINANCIAL APPS USED


They are open to trying alternative financial companies and services

Q40. Prior to taking this survey, how familiar were you with alternative or “non bank” lenders? Q41. Which of the following statements comes closest to your view… Q43. Have you ever taken out a personal loan from an alternative or “non bank” lender, such as Prosper, Lending Club or UpStart? (Asked if aware of alternative lenders, n=676; Results shown off total base)

Willingness to Use Alternative Services

57%Willing to use

alternative companies / services that

innovate to better meet needs

39%FAMILIAR WITH

ALTERNATIVE OR “NON-BANK” LENDERS

13%HAVE TAKEN OUT A

LOAN FROM AN ALTERNATIVE OR “NON

BANK” LENDER


They are receptive to using “non bank” lenders for ease, speed and accessibility

Q44. Based on your current knowledge of alternative banking, how likely would you be to use an alternative or “non bank” lender in the future?Q45. Which, if any, of the following describe why you would be likely to use alternative lenders? (Asked if likely to use alternative lender, n=473)

Easier application process

Does not rely solely on my credit score

More accessible

Faster application & review processes

More digitally-savvy

43%

41%

41%

38%

30%

Reasons to Use Alternative Lenders

(Shown: Among Those Likely to Use)

47%LIKELY TO USE ALTERNATIVE

LENDERS IN THE FUTURE


They are willing to switch brands if the services better meet their needs

Q11-12. Which of the following statements comes closest to your view…Q10. Which, if any, of the following would make you switch to another financial institution or brand? If another financial institution / brand offered…

Better interest ratesBetter rewards programs

More free servicesLower ATM fees

Better customer serviceBetter identity protection

Better online servicesMore physical locations

Better mobile app / technology

More lenient late policies

47%43%42%

38%35%

32%31%

25%23%23%

Top Reasons to Switch Financial Brands46%

LOOK FOR NEW FINANCIAL COMPANIES / SERVICES THAT BETTER

MEET THEIR NEEDS

77%WILLING TO SWITCH

FINANCIAL ACCOUNTS IF THEY LEARNED ABOUT A

BETTER ALTERNATIVE

Millennials & Credit


Knowledge Gaps: Credit Scores & Reports

Q1. How knowledgeable do you feel about each of the following aspects of personal finance? Credit scores & reportsQ17. How often do you check your… Credit score?Q21. And, to the best of your knowledge, what is your credit score? Q22. Below is a series of statements about credit. To what extent do you agree or disagree with each of the following statements?

Perceived Knowledge about

Credit Scores & Reports

71%KNOWLEDGEAB

LE

32%DO NOT KNOW THEIR CREDIT

SCORE

61%CHECK THEIR

CREDIT REPORT LESS THAN EVERY

3 MONTHS

67%HAVE QUESTIONS

ABOUT HOW CREDIT REPORTING AGENCIES CREATE CREDIT SCORES

29MILLENNIALS

OVERESTIMATE THEIR CREDIT SCORE BY 29

POINTS

Vs.


Assume someone will alert me if there’s an anomaly in my report/if my score is bad

Concerned that I will find something negative

Unsure how to check my credit report/score

Afraid it will hurt my credit score

Have never had a problem with my credit in the past

Do not think to check my credit report/score

Do not feel that it is necessary

11%

15%

18%

22%

23%

29%

37%

12%

16%

19%

24%

28%

31%

35%

Top Reasons for Not Checking Credit(Shown: Among Those Who Check Less than Every 3

Months)Credit Report Credit Score

Some think checking their credit is unnecessary; others simply do not understand the process

Q18. For what reasons do you not check your credit report more frequently? (Asked if checks report less than every 3 months, n=608)Q19. For what reasons do you not check your credit score more frequently? (Asked if checks score less than every 3 months, n=568)


Secure a home loanSecure a personal

loanSecure an auto loan

Rent a home

Lease an automobileQualify for a credit

cardSecure a student

loan

66%

57%

56%

54%

53%

53%

42%

20%

25%

24%

27%

26%

26%

43%

14%

18%

20%

19%

21%

21%

14%

Credit Score Impact on Ability to…Helped No Difference Hurt

Already, Millennials feel that their credit has had an impact on their lending and leasing options

Q33. To the best of your knowledge, has your credit card history ever hurt or helped you to secure a loan with good terms? (Asked if credit card user, n=669) Q39. In each of the following situations, did your credit score help or hurt your ability to… (Asked if currently have or have previously had; Secure a home loan n=310, Secure a personal loan n=373, Secure an auto loan n=493, Rent a home n=212, Lease an automobile n=277, Qualify for a credit card n=572, Secure a student loan n=527)

47%

27%

25%

Credit Card History Im-pact on Ability to Secure

a Good Loan(Shown: Among Credit

Card Users)Helped No differenceHurt

Millennials’ Financial Mindset


Despite having a good handle on their finances, many feel the odds are stacked against them

Q4. To what extent do you agree or disagree with each of the following statements?

Have a Handle on Their Finances

Feel Like They Are “Going It Alone”

Feel Like the Odds Are Stacked

Against Them

73%Feel like they have a good handle on

their finances

59%Feel like

they’re going it alone when it comes to

finances

57%Feel like the

odds are stacked against them when it

comes to finances

84%APP

USERS

62%HAVE DEBT

60%HAVE DEBT


Many worry about their ability to support themselves – or a family – in the future

Q6. When you think about your financial future, which TWO, if any, of the following are your greatest concerns?

Not being able to support a familyNot having enough saved to retire

Not becoming financially independentNot being able to pay off my debt

Not being able to fund my children’s educationNot being able to support my parents as they age

Getting my identity stolenFinancial setbacks due to future medical costs

Losing my savings in the stock market

30%28%

25%22%

18%14%14%

12%7%

Top Concerns for Financial Future(Shown: Top Two Choice)


Overall, they feel optimistic about their financial futures and ability to pay off their current debt

Q4. To what extent do you agree or disagree with each of the following statements?

83%Say being “debt

free” is an attainable goal

“Debt Free” is an Attainable Goal

71%Feel confident

about their financial future

Confident aboutFinancial Future

70% CURRENTLY CARRY DEBT

• 85% App user

• 81% Check Credit Often

• 77% Men

Appendix


Demographics

Totals may not add to 100% due to rounding

Category Subcategory Percent

GenderMale 50%

Female 50%

Age19-24 42%25-34 58%

Race / Ethnicity

White 58%African American 14%

Hispanic 20%Asian American 6%

Other 2%

Region

Northeast 18%Midwest 21%South 38%West 23%

Category Subcategory Percent

Education

High school or less 23%

Some college 38%

Bachelor’s degree 34%

Post-graduate 5%

College Student Status

Full-time 40%

Part-time 11%

Not a student 49%

Marital Status

Not married 61%

Married 38%

Income

Less than $50K 49%$50K to less than

$100K 37%

$100K or more 11%

Experian Millennial Credit & Finance Survey Report Part I of II

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Transcript of Experian Millennial Credit & Finance Survey Report Part I of II