Millennials could stand to learn a few credit-management habits
from older generations, according to research from Experian.
The credit rating agency's fourth annual "
State of Credit" report
(released November 2013) looked into how four generations manage
their credit card debt:
- The Greatest Generation (over 66 years old)
- Baby boomers (ages 47 to 65)
- Generation X (ages 30 to 46)
- Millennials (ages 19 to 29)
Although millennials tended to carry lower card balances and
have fewer cards, they are "over-utilizing bankcards" and
"beginning to develop bad credit habits," according to the report.
For example, millennials are more than four times as likely to pay
their card bills late, compared with the Greatest Generation, and
more than twice as likely as baby boomers. Younger generations'
credit utilization is also dangerously high: Generation X and
millennials are both revolving 37 percent of their credit limits
each month, while the Greatest Generation and baby boomers are
revolving 14 percent and 30 percent, respectively.
These slip-ups combined with a shorter length of credit history
give millennials the lowest average credit scores out of all the
The chart below compares credit-management habits across
generations. The "late payments" figures represent the average of
incidence of delinquency: In other words, they show the average
number of accounts paid late across all individuals analyzed. The
analysis was based on a statistically significant sampling of
Experian's credit database.
Infographic: Gen Y embraces mobile bill pay,
boomers like mail