Survey Says: Personal Finance Knowledge Gaps Are Leading to Costly Mistakes
April 17 2024 - 6:00AM
Business Wire
New Experian® research underscores the need for
improved financial education as younger consumers bear the brunt of
costly financial errors
Lack of financial knowledge is leading to costly financial
missteps for many Americans according to new research1 released
today by Experian®. A survey of 2,000 adults across the U.S.
revealed 3 in 5 adults feel their limited understanding of credit
and personal finance has led them to make financial mistakes, with
60% of this group stating these mistakes have cost them $1,000 or
more.
This trend is particularly apparent among younger groups with
71% of Gen Zers and 70% of millennials claiming their inadequate
knowledge of credit and personal finance has come at a price.
Twenty-nine percent of Gen Zers and 38% of millennials report these
financial mistakes have cost $5,000 or more.
Experian's research also highlights the gap between the desire
for financial education and its availability in schools. While 78%
of adults believe that personal finance courses should be mandatory
in high schools, only 25 states across the U.S. currently require
them schools, according to the advocacy group Next Gen Personal
Finance.
The study revealed many consumers have an appetite for further
education, with two-thirds of adults (66%) stating they’d like to
expand their knowledge of credit and personal finance, with even
higher percentages among Gen Zers (80%) and millennials (79%).
“Understanding credit and personal finance is paramount for
financial well-being, especially for younger generations navigating
today's financial landscape,” said Christina Roman, consumer
education and advocacy manager at Experian. “Financial mistakes,
such as missed payments, overpaying on interest or simply not
understanding the terms you are agreeing to, can come at a serious
cost for consumers. As part of our mission to bring financial power
to all, we are committed to being a trusted resource for consumers
and want to remind them about the free tools and educational
resources we have available to help them live more financially
empowered lives.”
Where consumers are learning today
According to Experian’s research, adults most frequently learn
about credit and personal finance from a parent or family member
(36%); in school, college or through community classes (33%); or
through online research (32%). Additionally, they consider banks
and credit unions (45%), financial advisors (48%) and national
credit reporting agencies like Experian (37%) to be some of the
most trusted sources to learn about improving their credit
score.
Not surprisingly, social media is another common source of
information about credit and personal finance. Thirty percent of
adults have turned to social media to learn more about credit and
personal finance. This sentiment rang especially true for America’s
youngest consumers with over half of Gen Zers (52%) and 47% of
millennials stating they learned about credit and personal finance
through social media in some form, including YouTube (30% Gen Z,
31% millennials), TikTok (20% Gen Z, 15% millennials) and Instagram
(18% Gen Z, 16% millennials).
Experian’s free tools and resources
Those looking to expand their financial knowledge are encouraged
to take advantage of Experian’s free tools and resources,
including:
- Signing up for credit monitoring and receiving a free copy of
your Experian credit report and FICO Score®2 monthly at
www.experian.com or via Experian’s mobile app. Experian also offers
access to personal finance and credit building tools, such as:
- Experian Boost®: Consumers can add positive telecom,
utility, video streaming service and qualifying residential rent
payments to their Experian credit file for an opportunity to
improve their credit scores by visiting
www.experian.com/boost.3
- Experian Go™: Consumers without an established credit
history can download Experian’s mobile app and enroll in a free
Experian membership to establish, use and build credit responsibly
with Experian Go.
- Experian’s official credit advice blog, Ask Experian, has
answers to common questions, advice and education about credit.
Consumers can find additional credit education resources at
http://www.experian.com/consumereducation.
Consumers are also encouraged to join Experian’s weekly
#creditchat hosted by @Experian on Twitter with financial experts
every Wednesday at 3 p.m. Eastern time. In recognition of Financial
Literacy Month, consumers can learn personal finance basics from
experts each week on topics, including budgeting, savings, credit
and debt, and more.
About Experian
Experian is the world’s leading global information services
company. During life’s big moments – from buying a home or a car,
to sending a child to college, to growing a business by connecting
with new customers – we empower consumers and our clients to manage
their data with confidence. We help individuals to take financial
control and access financial services, businesses to make smarter
decisions and thrive, lenders to lend more responsibly, and
organisations to prevent identity fraud and crime.
We have 22,000 people operating across 32 countries and every
day we’re investing in new technologies, talented people, and
innovation to help all our clients maximise every opportunity. With
corporate headquarters in Dublin, Ireland, we are listed on the
London Stock Exchange (EXPN) and are a constituent of the FTSE 100
Index.
Learn more at www.experianplc.com or visit our global content
hub at our global news blog for the latest news and insights from
the Group.
1 Experian commissioned Atomik Research to conduct an online
survey of 2,005 adults throughout the United States. The makeup of
the sample is representative of the U.S. population based on
national census data regarding demographic variables such as
gender, age and geographical regions. The margin of error for the
overall sample is +/- 2 percentage points with a confidence level
of 95 percent. Fieldwork took place between March 17 and March 21,
2024.
2 Credit score is calculated based on FICO Score 8 model, unless
otherwise noted. In addition to the FICO® Score 8, we may offer and
provide other base or industry-specific FICO® Scores (such as FICO®
Auto Scores and FICO® Bankcard Scores). Your lender or insurer may
use a different FICO® Score than FICO® Score 8 or such other base
or industry-specific FICO® Score (if available), or another type of
credit score altogether. Learn more.
3 Results will vary. Not all payments are boost-eligible. Some
users may not receive an improved score or approval odds. Not all
lenders use Experian credit files, and not all lenders use scores
impacted by Experian Boost. Learn more.
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version on businesswire.com: https://www.businesswire.com/news/home/20240417511977/en/
Amanda Garofalo Experian Public Relations 1 714 460 3739
amanda.garofalo@experian.com
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