As usual, the mainstream media reporter buries the lead in the body of the story. There is much scorn for the millennial generation by the older generations. Of course millennials will have the lowest credit scores. They have lower paying jobs and less time to build up a credit history. Duh.
The chart below actually shows Generation X to be in the worst shape. Millennials have a debt to income level of 1.5, while Gen X has a debt to income level of 2.5. Even Boomers have a debt to income level of 1.9.
Millennials are burdened with more student loan and auto loan debt than Gen X at similar ages. The eye opener is how few millennials are using credit cards – far less than Gen X at the same age. This fact combined with the fact that millennials have just surpassed the dying off Boomers as the largest generational cohort in the country, explains why retail sales have gone stagnant and credit card debt is billions lower than it was in 2008.
The millennials may have their issues, but not going into credit card debt as the political and financial status quo desires could be a game changer. An ever expanding level of consumer debt is the only thing sustaining this Ponzi Scheme. If the millennials refuse to cooperate, the game is over.
Guest Post by Quentin Fottrell
This generation of Americans has the lowest credit score
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The largest generation of Americans has the lowest credit scores.
Millennials — those roughly defined as aged between 19 and 34 — have the lowest credit scores of any generation of Americans. They have an average credit score of 625 on an average debt of $52,120. By comparison, Generation X (aged 35 to 49) have a credit score of 650 on average debt of $125,000, while both baby boomers and the Greatest Generation (with a combined age of between 50 and 87) have credit scores of 709 on average debt of $87,438.
“It’s important to keep in mind that credit scores are built on credit experiences,” says Michele Raneri, vice president of analytics and business development at Experian, while talking about millennials. “While this generation has been slower to use credit, they have plenty of opportunities to build a positive credit history.”
