More than Two-Thirds of Young Adults Make Significant Financial Mistakes
New Credit Karma research shows Credit Fumbles in early adulthood are
fueled by a lack of financial education and have a lasting impact on
quality of life
SAN FRANCISCO–(BUSINESS WIRE)–Credit Karma announced today
the results of its research into the “Credit Fumble” phenomenon, a
behavioral cycle where young consumers, many without the necessary
financial education, fall victim to largely avoidable financial mistakes.
Drawing upon a survey of 1,051 Americans between the age of 31-44 and
data from Credit Karma’s more than 45 million members, the company found:
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More than two-thirds of people surveyed (68 percent) made at least one
major Credit Fumble before turning 30: either overspending on credit
cards, missing payments, having an account sent to collections, or
defaulting on a loan. -
Three out of four of respondents felt like the financial mistakes they
made before they turned 30 had a negative impact on the quality of
their life. -
Only 28 percent of people surveyed received some type of personal
finance education before college, with the majority of that education
(58 percent) coming from parents. -
More than two-thirds of people surveyed (69 percent) did not properly
understand what credit scores were when they got their first credit
card; 73 percent said that better financial education could have
prevented them from making credit-related mistakes. -
These Credit Fumbles make it hard for people to improve their
financial situation as an adult: 61 percent of people surveyed were
turned down for a credit card after making a Credit Fumble; more than
a quarter (26 percent) had to move back in with their parents to
recover financially.
“Credit Karma’s Credit Fumble research quantifies a phenomenon that’s
played out for too long in America, with young adults making unnecessary
mistakes without the right financial education that have a big impact on
their lives,” said Credit Karma CEO and Founder Kenneth Lin. “These
early mistakes can have a lingering impact on the quality of people’s
lives and we feel that with better, targeted education and learning
tools for new-to-credit consumers, this cycle can be broken.”
Since 2014, Credit Karma has worked with college and university students
across the country to educate young Americans before their first touch
point with credit, through its Campus Challenge and Student Ambassador
program. Alongside free credit scores and reports, it offers its members
friendly, personalized information to help each of them understand and
make the most of their individual situation.
To create a free account, visit creditkarma.com.
About Credit Karma
Credit Karma’s goal is to save Americans time and money. Through
analysis of more than 45 million members’ finances, Credit Karma
researches and recommends credit cards, loans and insurance based on
each individual’s specific credit profile, drastically simplifying some
of the most confusing and tedious yet important tasks in personal
finance.
The company started by providing free credit scores to recreate the
financial industry around people instead of banks. It continues to
expand its completely free offerings including its Credit Score
Simulator, credit monitoring and friendly, personalized information to
help each person understand and make the most of their individual
situation.
To create a free account, visit creditkarma.com
or download the mobile app from the Google PlayTM or Apple®
App StoreSM.
Contacts
Method Communications
Clare Sayas, 415-891-4906
clare@methodcommunications.com
