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NextGen Magazine

 
 

Millennials Rejected on Loans More Than Any Other Age Group

By:
Chris Gaetano
Published Date:
Aug 28, 2019
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A recent poll has found that millennials, defined as those between 23 and 38, are rejected on applications for credit cards, mortgages, car loans and other financial products more than any other age group, according to CNBC

The survey of 2,500 U.S. adults, which was conducted for BankRate.com, found that 58 percent of millennials report being denied at least one financial product, such as credit cards and loans, because of their credit score. In contrast, 53 percent of Gen X and 27 percent of baby boomers reported the same. This is despite the fact that, on average, their credit scores are not substantially worse than those of other age groups. The average millennial has a credit score of 668, according to CNBC, versus 667 for Gen Z, 688 for Gen X, and 731 for boomers. 

So why the higher rejection rates? Bankrate.com said one factor could be the CARD Act of 2010, which forbade credit cards from being issued to those under 21 without either a job or a co-signer. This was done to curtail marketing to college students that some characterized as predatory, but Bankrate said it also made it more difficult for them to develop a credit history. Compounding this situation is the fact that millennials use credit cards less often than other groups, with a significant portion preferring debit cards instead. 

Rejections rates might increase even more should the economy take a major downturn, according to CNBC, as lenders typically increase their credit score requirements during these times.