New Research from ID Analytics Finds Once Millennials Are Declined for Credit They May Not Return

Millennials who don’t receive service tend to stop seeking service for a

Analytics LLC
, a leader in consumer risk management, today shared
new research revealing that over six out of 10 millennials declined for
credit are not seen applying again for at least 12 months. The study
found that millennials often apply for credit but are declined due
either to their lack of credit history or to low credit scores, despite
often having an ability to repay according to data from the ID Analytics
ID Network®, one of the nation’s largest networks of cross-industry
consumer behavioral data.

A frequently referenced study reports that 63 percent of
millennials do not have a credit card. While many millennials may not
own credit cards, it is not for a lack of applying for credit. New data
from ID Analytics find that millennials are applying for credit cards at
higher rates than Generation X or baby boomers (35 percent vs. 29
percent vs. 28 percent, respectively). ID Analytics also found that
millennials actually make up a larger percentage of total credit card
applicants (35 percent) than marketplace loan applicants (28 percent),
indicating that this group is interested in traditional forms of credit.

“Fewer millennials are taking out credit cards than most of us would
expect. Financial institutions need to understand why in order to engage
this important generation,” said Tiffani Montez, senior analyst at Aite

Decline of a Generation

While they may be applying for credit, millennials have lower credit
activation rates than baby boomers. Fewer than half of millennials, the
largest generation of U.S. consumers, have credit scores that will
qualify them for credit accounts with most mainstream lenders. One-third
of millennials cannot be scored by a credit bureau due to their lack of
credit history, and of the “scoreable” group, two-thirds of consumers
under 30 have subprime or non-prime credit scores. . ID Analytics’
research shows that the most common consequence of declining a
millennial applicant is that the consumer walks away for at least a
year—both from the enterprise and from credit/service seeking altogether.

“Traditional credit scores may have served previous generations well,
but their lack of visibility into critical modern credit
responsibilities like the payment of cell phone bills leaves many
millennials with incomplete or nonexistent histories at the major credit
bureaus,” said Patrick Reemts, vice president of credit risk solutions
at ID Analytics. “Without a complete picture of millennials’ credit,
many financial services companies are turning away good consumers, and
the bad news for financial institutions is that only ten percent of
millennials will re-apply to the same lender once they have been

Alternative Data Puts a Face to Credit Invisibles

In order to capitalize on these credit-invisible millennials and
increase market opportunities, lenders will need to use alternative
credit data. Alternative data consist of credit behaviors not
consistently reported to national credit bureaus, including
telecommunications and utilities payments and online lending activity.
Using this alternative data, lenders are able to gain a more complete
view into a consumer’s credit risk and worthiness, which is particularly
crucial for the millennial demographic.

More information on millennials and credit can be found in the ID
Analytics white paper “Millennials:
High Risk or Untapped Opportunity
,” and its most recent research
brief “Debunking
Millennial Myths

About ID Analytics LLC

ID Analytics is a leader in consumer risk management with patented
analytics, proven expertise, and real-time insight into consumer
behavior. By combining proprietary data from the ID
—one of the nation’s largest networks of
cross-industry consumer behavioral data—with advanced science, ID
Analytics provides in-depth visibility into identity risk and credit
worthiness. Every day, many of the largest U.S. companies and critical
government agencies rely on ID Analytics to make risk-based decisions
that enhance revenue, reduce fraud, drive cost savings, and protect
consumers. ID Analytics is a wholly-owned subsidiary of LifeLock,
; please visit us at

ID Analytics and ID Network are registered trademarks of ID Analytics
LLC. All other trademarks and registered trademarks are the property of
their respective holders.


MSLGROUP for ID Analytics LLC
Jennifer Asaro/Chris Poisson