Millennials have now passed baby boomers as the largest segment of the U.S. population, this digitally independent generation is still much less savvy than older generations when it comes to their finances and credit management.
The Experian survey highlights the credit characteristics of an average millennial as well as a look at how other generations are faring. The groups studied included Generation Y/millennials (ages 19-34), Generation X (ages 35-49), and baby boomers and the greatest generation combined (ages 50-87).
Even with millennials taking a little longer to establish some forms of credit compared with previous generations, their sheer numbers make them an important and growing market segment. When comparing credit usage of a more youthful Generation X population, there appear to be some interesting trends in origination patterns.
Auto loans make up 14 percent of all recently opened accounts for millennials, compared to 1 percent for their Generation X counterparts at the same age in 1998. Similarly, student loans make up 24 percent of all new accounts for millennials, compared to 20 percent for their Generation X counterparts at a comparable age. The study also shows that fewer millennials are using bankcards, with only 27 percent of their recently opened accounts being bankcards, compared to 46 percent for their Generation X counterparts at the same age.
The study also showed that millennials appear to favor auto loans over leases, as there were 13.4 auto loans per one lease. This ratio is 9.3 to 1 for Generation X and 8.3 to 1 for baby boomers. However, auto leases tend to be a product that may attract older consumers because they tend to have higher and more established credit. Consequently, findings from the analysis showed that the older millennials were more likely to have an auto lease than their younger counterparts.
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