What Causes the Problem?
According to a survey of over one thousand Americans*, most people dive into credit by their early 20s, many of them without any financial education, making significant mistakes in the process.
75% of respondents said they got their first credit card before they turned 25
72% received no personal finance education before college
69% of Americans didn't understand what credit scores were when they got their first credit card
What are the Most Common Mistakes?
Most Americans make at least one major Credit Fumble before their 30s.
54% overspent on credit cards, creating debt they were unable to pay off within a year
47% missed at least one payment on a credit card or a loan
44% had an overdue account sent to a collections agency
25% of Americans have defaulted on a loan before turning 30
Student loans were the most common loan respondents defaulted on before their 30s
75% felt defaulting or having an account sent to collections negatively impacted their quality of life
What are the Effects?
While people make these Credit Fumbles early on, the effects can be long-lasting and have a major impact on their life.
28% are still paying back credit card debt from before their 30s
26% had to move back in with their parents because of a Credit Fumble
10% were turned down for a job because of bad credit after defaulting on a loan or having an account enter collections
61% were later denied a credit card because of a Credit Fumble
31% were later rejected for a car loan because of a Credit Fumble
16% were later turned down for a mortgage because of a Credit Fumble
How can Credit Fumbles be Prevented?
Increased access to financial education can prevent many of these financial mistakes.
42% admitted irresponsibility was a contributing factor to a Credit Fumble
73% believed better education could have prevented a Credit Fumble
86% felt that personal financial management courses should be required at high schools
*Credit Karma surveyed 1,051 Americans between the ages of 31-44, in partnership with research company Qualtrics, about the difficulties they faced managing their finances before their 30s.