Make Credit Education a Cornerstone of Millennial Outreach
Millennials, individuals aged 23 to 38, have shown a strong sentiment to improve their credit standing, according to a 2019 Experian survey of consumers. Consumer finance companies willing to address this need are in the perfect position to build relationships, earn trust and enable millennials with the right financial products that meet their unique needs.
Growing Debt and the Desire for Improvement
Recent research finds Millennials are increasing their credit utilization at a rate that concerns some experts:
- The New York Federal Reserve reported in February that Millennial debt had increased 22% from 2013 to 2018, and now exceeds $1 trillion.
- Much of that debt consists of student loans, as the average millennial student loan balance among millennials was $34,504 in the first quarter of 2019, up 8% from the first quarter of 2018. This indicates a portion of millennials are still pursuing education and that their earning potential will also continue to increase.
- Millennials increased their average credit card debt by 7% in the past year, to $4,712. That’s a relatively low total balance, but given their recent entry into the credit market and commensurate low borrowing limits, it probably represents fairly high utilization. Credit education can help millennials learn about how factors like this affect their credit score.
- The average FICO® Score credit score for millennials is 665, considerably lower than the U.S. average of 701. FICO categorizes a 665 credit score as “fair.” Lenders may view applicants with that score as “near-prime,” ripe for conversion to the “prime” category, where they could be eligible for a much wider array of loans and credit products.
While these are significant challenges for millennials, results from a 2019 Experian Boost™ Consumer Survey show that they have a strong sentiment to improve their credit standing. After trying Experian Boost™—a free tool that lets people share phone- and utility-payment data so they can be factored into their Experian credit scores—survey participants reported the following:
- 53% said they "felt more motivated" to learn about their credit score.
- 59% said they believed knowing more about credit management would be beneficial.
- 59% wanted to learn about credit through features like Experian Boost.™
A Credit Education Opportunity
Millennials’ appetite for credit education provides a powerful opportunity for consumer-finance companies to engage with millennials—those actively seeking borrowing options, and those wishing to build their credit as groundwork for future borrowing.
Recent Experian research found that innovative digital resources are highly effective at informing, educating and energizing millennial audiences. That makes credit education services, delivered over digital and mobile channels where millennials are most at home, an ideal millennial-outreach vehicle.
Experian credit education services deliver credit scores and credit reports, but they go well beyond that, with specific, actionable credit-improvement guidance based on each individual’s credit history. Experian’s suite of credit education solutions helps millennials understand how changes in behavior can increase credit scores, helps them to set score-building goals, and shows them how good credit habits increase borrowing power over time.
Easily integrated with any digital brand presence via white-label or fully hosted options, Experian’s suite of credit education solutions can be deployed quickly to add valuable “millennial appeal” to consumer-finance websites and smartphone apps.
Powering Tailored Credit Offers
Delivering the valuable financial-education content millennials crave can help them prioritize financial goals. This creates strong, positive engagement with your brand, builds goodwill and trust, and helps users become better candidates for credit products.
The Experian technology that enables the delivery of customized credit education also provides deep insights into users’ changing needs and creditworthiness. Content tied to individual users’ credit files is an ideal platform for highly specific, relevant product offers.
Experian’s powerful prequalification tools and best-in-class marketing expertise make it possible to serve in-app offers aligned with the customer’s specific credit scores and educational interests which can increase the likelihood that they’ll act on them.
To learn more about how customized credit education content can help you attract, and engage millennials, download our free eBook,Credit Education: An Olive Branch with ROI.