Millennial’s might need some schooling on personal finance, according to a new study by Experian, which shows that despite the fact they are worried about their financial futures, many don’t have the information they need to get their finances into shape.
Experian talked with over 1,000 millennials about personal finances gaining insights on everything from their credit knowledge and technology use, to loan status and how they feel about the future. In general, while most millennials report feeling good about their level of credit knowledge, it might be a bit misleading, with 32% admitting that they have no idea what their credit score is and 67% said they need more information on how they are generated.
Some millennials check their credit scores less than they should. Why? There are a few reasons – some believe it’s not important, while others say they don’t know how. Still others are afraid it will actually hurt their credit scores. Of those who did know their score, three out of four also knew that their score either helped or hurt them financially when it came time to apply for a loan or a lease.
Credit card debt trumps all other debit
Millennials are often perceived as being overwhelmed by student loan debt, but according to this study, that is not the case. Credit card debt actually takes the top spot when it comes to millennial debt, with 38% carrying credit card balances, and student loans coming in second at 36%. They are followed by auto loans, home loans and personal loans.
Where will millennial get their loans in the future? Many will be giving banks the cold shoulder, with 47% willing to go with alternative lenders, because their application process is easier, and does not just rely on their credit score. They also indicate that they alternative lenders are more approachable, review their application faster, and are digitally savvy.
Apps and tech saves the day
Finance apps surpass all other ways of managing money for millennials, with 73% using them to manage their finances. Respondents reported having at least three of these apps loaded onto their phones.
This survey was conducted for Experian Consumer Services online and had 1,002 millennial respondents falling in the 19 to 34 age range. The survey took place from August 14 to 19.