Experian Consumer Data: Consumers Resolve to Improve Credit Scores in 2020

Published: December 13, 2019 by Joe Talbott

What’s driving financial wellness for consumers in 2020? Holiday stress in 2019.

Even though 2 out of 3 consumers surveyed by Experian, say they save money for holiday shopping, an analysis of the same group of consumers shows that the majority are stressed on adding to their debt and staying within their budget this season. ¹ After dealing with crowds, consumers in the group ranked not having enough cash or credit to buy gifts this season as the worst aspect of holiday shopping. ¹

If consumers are saving money to shop what is causing them to break the budget? Some interesting statistics from the Experian consumer survey data show how the current state of credit in the US is affecting consumer spending habits:

  • 35% of consumers feel obligated to spend more than they can afford¹
  • 75% of consumers will spend more this year than 2018 but; ¹
  • 47% have spent more on unexpected holiday expenses than gifts and; ¹
  • 39% say that running out of money is a barrier to planned holiday shopping, while; ¹
  • 1 in 5 say they were denied credit due to their credit rating¹

The consumer trend data shows consumers are resolving to improve their credit score in 2020 by increasing their income and paying their bills on time. ¹ The recent consumer survey showed that 51% of consumers are making plans to increase their income potential in 2020. ¹

This strong motivation to improve finances before the holiday shopping season and beyond is especially felt among younger generations, commonly known as millennials and generation Z, ages 18-34, who tend to sit in the near-prime credit score range, perfect for graduating into a new score range via credit education solutions and enabling into cards that are a best fit. ¹

The data also showed that the majority surveyed plan to pay cash for gifts and that 71% of that group are ages 18-24. ¹ When asked what would entice them to open a new credit card, nearly 20% said they would be interested in getting a card that offered them a free credit score and 30% said they would be interested in getting identity theft protection as a benefit. ¹

What are the best ways to help consumers this season and leverage data trends to engage and retain new customers?

  • Guide your customers to last-minute savings. It’s a critical period for brands to help their customers save during this stressful time, which could build the foundation for a positive long-term relationship.
  • Provide budgeting and credit tools. Not only do financial institutions and credit card issuers have a responsibility to offer easy-to-understand budgeting and credit education, but this proactive initiative can also help to establish greater engagement. Credit education is particularly important for younger consumers, who are just learning budget basics and might not know the impact of a buy now, pay later plan, or using a retail credit card versus a brand credit card. Financial institutions and card issuers can communicate helpful tips via email, push notifications to app users, and reminders available in their online accounts.
  • Offer customers the option of ID protection services. Only a little more than half of consumers say they will be vigilant when shopping online. Consumers are generally placing their trust and expectations in the hands of businesses to protect them during the holiday season, which means financial institutions have a responsibility to keep this trust top of mind and find ways to make sure their customers know. Offering ID protection as part of a membership package helps differentiate your organization, engage customers, and show them that you have their back.

Consumers are leaning into financial wellness in 2020, and starting now by focusing on strategic moves to improve their credit score and overall financial health. Consumer services firms should lean in too by providing value-added services like credit education, and identity protection with credit monitoring to their product portfolio for 2020 and beyond.

¹Experian Holiday Survey Data 2019

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