Millennial Credit Risk: 5 Common Myths

by Patrick Reemts

Patrick Reemts

In 2015 ID Analytics released a whitepaper titled Millennials: High Risk or Untapped Opportunity, which debunked common myths regarding the millennial generation and consumer behavior. Recently, ID Analytics released a follow-up study examining the potential consequences of millennials’ credit status. How are millennials reacting to being declined credit? How often is it happening? What are the long term consequences for lenders?

Here are 5 common myths around millennial credit risk, and facts based on ID Analytics research.

MYTH 1: Millennials aren’t interested in traditional credit and financial services.
  • Fact 1: ID Analytics research has found that millennials are applying for traditional services at higher rates than any other generation.


  • Fact 2: Millennials are being declined at higher rates, resulting in them walking away for the service for a given year
  • Fact 3: Traditional credit scores may hinder millennials ability to gain access to credit and financial services, due to their inability to accurately reflect credit risk for this generation.


MYTH 2: Millennial “low score” and “no score” consumers are high risk.
  • Fact 4: ID Analytics research shows that millennials with “low or no traditional scores” were actually safer than they appeared.
  • Fact 5: Traditional credit scores, often the deciding factor in credit decisions, frequently underestimate millennials’ creditworthiness due in part to their limited visibility into critical behaviors like cell phone bill payment.


  • Fact 6: Over 30% of millennial consumers cannot be scored by traditional credit tools, and of those who can be scored are evaluated as sub-prime.1


MYTH 3: Millennial consumers aren’t being declined that much.
  • Fact 7: Over 60% of millennials are declined for credit at least once per year and roughly 20% of millennials are declined multiple times per year.
  • Fact 8: While 25% of millennials 18-22 are seen being declined at least twice per year, 20% of millennials 28-32 are also seen being declined multiple times, highlighting that this problem continues to exist as millennials get older.


MYTH 4: Millennials don’t exhibit loyalty to service providers, they will just bounce around applying to multiple lenders.
  • Fact 9: ID Analytics research shows that that once a millennial is declined, there is a good chance that they won’t be seen applying again within a given year – for anything.
  • Fact 10: Roughly 60% of millennials weren’t seen applying for any credit or service in the ID Network® for a year after being declined. [Figure 1 below]


  • Fact 11: For declined millennials who choose to keep seeking credit or services, research saw that most did not re-apply in the same industry they applied in. [Figure 2 above]
  • Fact 12: If a millennial applicant continues to apply in the same industry, only half of the declined applicants will resubmit to the same company (or 1 in 10 millennials). [Figure 3 above]


Myth 5: There are no long-term consequences for lenders declining millennials.
  • Fact 13: To increase market opportunities, lenders should capitalize on these “credit invisible” millennials with targeted products and processes.
  • Fact 14: Organizations are in control of millennial engagement and are at risk of losing a potential new customer long-term, and therefore incremental revenue.
  • Fact 15: By leveraging traditional and alternative forms of credit data, organizations will be able to issue more accurate and competitive offers to consumers, applicants and existing customers.


To learn more about millennial credit-seeking behaviors, download our white paper Millennials: High Risk or Untapped Opportunity or our research brief Debunking Millennial Myths. And for more information on our alternative credit data solutions, read about Credit Optics®.


Patrick Reemts is Vice President of Credit Risk Solutions at ID Analytics, LLC