Nearly half of all millennials are 90 days behind on at least one of their bills—but members of Generation X are right on their heels.
Data from Experian's latest State of Credit report indicates that 36% of all Americans have at least one account in collections, meaning it is at least 90 days overdue. Generation Y, also known as Millennials (born 1982-1995), come in well above the national average at 44%. But their Gen X (born 1967-1981) counterparts aren't doing much better, with 43% having at least one account in collections—despite generally earning more and having been in the workforce longer.
Baby Boomers (Americans born 1947-1966) seem to be more responsible with their money, with only 30% having an account in collections, while the Silent Generation (born before 1946) is best of all, at 18%. And while Generation Z, which consists of adults ages 18 to 20 seem more responsible with only 19% carrying a collection account, many of these young folks simply don't have experience with credit yet.
"That figure is artificially low," Kelley Motley, director of analytics at Experian says of Gen Z. "They will likely need a few years to catch up."
Watch Bob Sullivan discuss generational differences on spending and debt.
Motley adds that one of the factors driving these delinquencies is auto loans, a category of lending that has recently opened the door to non-prime lending. And many millennials fall into that category.
They are also in a special category of people who are facing stagnating wages and high levels of student loan debt—both factors that can hamper their ability to pay their bills on time. Many are also saddled with steep medical debt. But there's a reason Gen Y isn't far behind; Gen X-ers have missed out on significant wage growth since the Great Recession.
It's no wonder, then, that millennials are feeling the pinch of carrying debt. In a recent survey released by the American Institute of CPAs, a whopping 68% of millennials said that debt has had a negative impact on their life.
And that debt can snowball—when an account goes into collections, it has a negative impact on your credit score, which can impact your future borrowing and the ability to get good rates on other kinds of loans, like a mortgage.
Want to instantly increase your credit score? Experian Boost™ helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.
This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.