The majority of Millennials are familiar with cosigning and have tapped a cosigner in the past New survey from Experian Consumer Services reveals cosigning trends of Millennials
COSTA MESA, Calif., March 31, 2014 /PRNewswire/ -- Nine in 10 Millennials are familiar with cosigning and nearly two thirds used a cosigner in the past, according to a new survey from Experian Consumer Services. In addition, results show that Millennials look to their parents to cosign on their behalf. Three in four Millennials report they would ask their parents to cosign for them in the future, and 77 percent say their parents likely would agree. Even though they feel confident they could keep their accounts in good standing, 87 percent of respondents say they would consider how their financial actions might impact their cosigner's credit.
"In today's market, young adults will likely need a cosigner at some point and will turn to their parents for help," said Ken Chaplin, senior vice president of marketing for Experian Consumer Services. "Since the cosigner guarantees the person for whom they are cosigning will repay the debt on time and in full, it's important that both parties understand repayment expectations and communicate guidelines so they can be confident in their credit decisions."
What are they buying?
Survey results indicate that two in three Millennials needed a cosigner in the past, which most often was for college loans (35 percent) or residential leases (32 percent). Other reasons Millennials need a cosigner include car loans (19 percent); legal agreements for credit cards (17 percent); car leases (11 percent); or home loans (6 percent).
How is their repayment status?
Of respondents who reported having used a cosigner for a loan or a lease, the majority handle the responsibility of credit well, paying off their account in good standing or keeping it active in good standing. The net total of contracts reported in bad standing due to late payments, with missed payments or in default is 8 percent.
How do cosigners manage a bad situation?
Of respondents who reported an account in bad standing:
- Thirty-two percent of their cosigners made payments when the primary signer could not
- Seventeen percent of their cosigners did not find out about the problems right away
- Twelve percent of their cosigners' credit score was negatively affected
- Seven percent of cosigners took on the debt once the primary signer faulted
Millennials Live Credit Confident
Fifty-four percent of respondents admit that they would worry about negatively impacting their cosigners' credit scores. However, 91 percent expressed confidence that they could keep accounts in good standing and not affect their cosigners' credit scores negatively.
Consumers can learn more by visiting http://bit.ly/ExperianCosigner and watching the most recent commercial from Experian Consumer Services about how they can Live Credit Confident™ when cosigning.
The data points referenced above come from a study commissioned by ConsumerInfo.com® Inc., an Experian company, produced by research firm Edelman Berland and conducted as a national online survey among a representative sample of 1,000 adults ages 18 to 30. The interviews took place from January 24, 2014, to January 31, 2014. The margin of error is plus or minus 3.1 percent.
Experian Consumer Services
The Experian Consumer Services division provides credit monitoring and other informational products, such as identity protection, to millions of consumers via the Internet. The organization enables consumers to monitor their credit reports online, check their credit scores and protect against identity theft. Its products include Experian Credit TrackerSM and ProtectMyID®.
Experian Consumer Services has established integrated, cobranded relationships with leading online financial destinations that provide consumers with a broad range of comprehensive online financial products and information essential to managing one's financial life. For more information, visit http://www.experian.com.
This press release is provided for general guidance and information. It is not intended as, nor should it be construed to be legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal issues or financial issues involved with credit decisions.
Experian® is a leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2013, was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.
For more information, visit http://www.experianplc.com.
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Experian Consumer Services
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SOURCE Experian Consumer Services