Millennials are technology savvy and the most connected generation in history and owning a cell phone is a must. The Pew Research Center calls them “history’s first ‘always-connected’ generation, treating their multitasking, handheld devices’ almost like a body part”.1 A recent survey by USA Today confirms that 87% of millennials claim their phone never leaves their side.2 These “always connected” millennials are in the midst of graduation season and getting ready to enter college, or leave college and enter the workforce. For some this also means leaving their family’s mobile plan and opening up their own mobile accounts. So while millennials are extremely comfortable with technology, when they graduate high school or college, how easy is it for them to establish their own accounts with wireless carriers?
In a recent study conducted by ID:A Labs, we found that millennials are seeking independent relationships with wireless carriers, but they are being accepted at a much lower rate than those in other age demographics due to their lack of activity in traditional credit and financial markets. Traditional credit scores include mortgage, credit card, auto loans and other installment loan payment history. Based on our findings, many millennials begin their financial relationship by acquiring mobile phone service and don’t have these other credit products, which means they are likely to have lower credit scores.
Are your credit policies keeping millennials from becoming your customers? By relying on traditional credit scoring, you could be denying contracts to these “mobile” millennials. It may be time to consider alternative credit solutions to avoid losing out on the most “connected” demographic in the United States. To learn more about millennial credit activity, read our new white paper Millennials: High Risk or Untapped Opportunity.
Patrick Reemts is Vice President of Credit Risk Solutions at ID Analytics, LLC.