Credit Lending

The first six months of 2016 has shown that the total credit card limits among the subprime and deep subprime credit range totaled $6.4 billion, the highest amount reported for those groups in the last five years. Our Q2 2016 Experian-Oliver Wyman Market Intelligence Report webinar will analyze the trends impacting consumer credit decisions in the current economy. The data is from the latest Experian Market Intelligence Brief report.

Consumers want to pay less. This is true in retail and in lending. No big surprise, right? So in order for lenders to capitalize and identify the right consumers for their respective portfolios, they need insights. Lenders want to better understand what rates consumers have. They want to know how much interest their customers pay. They want to know if consumers within their portfolio are at risk of leaving, and they want visibility into new prospects they can market to in an effort to grow. Luckily, lenders can look to trade level fields to be in the know. These inferred data fields, powered by Trended Data,  allow lenders to offer products and terms that serve two purposes: First, their use in response models and offer alignment strategies drive better performance, ROI and life-time value. As noted earlier, consumers want to pay less, so if they are offered a better rate or money-saving offer, they’re more likely to respond. Second, they ultimately save consumers money in a way that benefits each consumer’s unique financial situation- overall savings on interest paid over the life of the loan, or consolidation of other debt often combined for a lower monthly payment. These trade level fields allow lenders to dig into various trends and insights surrounding consumers. For example, Experian data can identify big spenders and transactors (those who pay off their purchases every month). Research reveals these individuals love to be rewarded for how they use credit, demanding rewards, airline miles or other goodies for the spending they do. They also really like to be rewarded with higher credit lines, whether they use the increased line or not. Fail to serve these transactors in the right way and lenders could be faced with lackluster performance in the form poor response rates, booking rates, activation rates and early attrition. Thus, a little trade level insight can go a long way in helping lenders personalize products, offers and anticipate future financial needs. Knowing the profitability of a customer across all of their accounts is important, and accessing this intelligence in a seamless way is ideal. The data exists. For lenders, it’s just a matter of unlocking it, making those small, but meaningful changes and keeping a pulse on the portfolio. Together, these strategies can help lenders keep their best customers and acquire new ones that stick around longer.

Consumer card balance transfer activity is estimated to be $35 billion to $40 billion a year. How do lenders identify these consumers before they make transfers? By using trended data.  While extremely valuable, trended data is very complex and difficult to work with. For example, with 24 months of history on five fields, a single account includes 120 data points. That’s 720 data points for a consumer with six accounts on file and 72 million for a file with 100,000 consumers — not to mention the other data fields in the file. Trended data allows lenders to effectively predict where a consumer is going based on where they’ve been. And that can make all the difference when it comes to smart lending decisions. >>What is trended data?

As regulators continue to warn financial institutions of the looming risk posed by HELOCs reaching end of draw, many bankers are asking: Why should I be concerned? What are some proactive steps I can take now to reduce my risk? This blog addresses these questions and provides clear strategies that will keep your bank on track. Why should I be concerned?  Just a quick refresher: HELOCs provide borrowers with access to untapped equity in their residences. The home is taken as collateral and these loans typically have a draw period from five to 10 years. At the end of the draw period, the loan becomes amortized and monthly payments could increase by hundreds of dollars. This payment increase could be debilitating for borrowers already facing financial hardships. The cascading affect on consumer liquidity could also impact both credit card and car loan portfolios as borrowers begin choosing what debt they will pay first. The breadth of the HELOC risk is outlined in an excerpt from a recent Experian white paper. The chart below illustrates the large volume of outstanding loans that were originated from 2005 to 2008. The majority of the loans that originated prior to 2005 are in the repayment phase (as can be seen with the lower amount of dollars outstanding). HELOCs that originated from 2005 to 2008 constitute $236 billion outstanding. This group of loans is nearing the repayment phase, and this analysis examines what will happen to these loans as they enter repayment, and what will happen to consumers’ other loans. What can you do now?  The first step is to perform a portfolio review to assess the extent of your exposure. This process is a triage of sorts that will allow you to first address borrowers with higher risk profiles. This process is outlined below in this excerpt from Experian’s HELOC white paper. By segmenting the population, lenders can also identify consumers who may no longer be credit qualified. In turn, they can work to mitigate payment shock and identify opportunities to retain those with the best credit quality. For consumers with good credit but insufficient equity (blue box), lenders can work with the borrowers to extend the terms or provide payment flexibility. For consumers with good credit but sufficient equity (purple box), lenders can work with the borrowers to refinance into a new loan, providing more competitive pricing and a higher level of customer service. For consumers with good credit but insufficient equity (teal box), a loan modification and credit education program might help these borrowers realize any upcoming payment shock while minimizing credit losses. The next step is to determine how you move forward with different customers segments. Here are a couple of options: Loan Modification: This can help borrowers potentially reduce their monthly payments. Workouts and modification arrangements should be consistent with the nature of the borrower’s specific hardship and have sustainable payment requirements. Credit Education: Consumers who can improve their credit profiles have more options for refinancing and general loan approval. This equates to a win-win for both the borrower and lender. HELOCs do not have to pose a significant risk to financial institutions. By being proactive, understanding your portfolio exposure and helping borrowers adjust to payment changes, banks can continue to improve the health of their loan portfolios. Ancin Cooley is principal with Synergy Bank Consulting, a national credit risk management and strategic planning firm. Synergy provides a rangeof risk management services to financial institutions, which include loan reviews, IT audits, internal audits, and regulatory compliance reviews. As principal, Ancin manages a growing portfolio of clients throughout the United States.

Experian defines how businesses should approach Identity Relationship Management for identity and devices to enable better fraud protection through our latest perspective paper, The 3 Pillars of Identity Relationship Management: How organizations can reduce risk and increase engagement.

Ten years after homeowners took advantage of a thriving real-estate market to borrow against their homes, many are falling behind on payments, potentially leaving banks with millions of dollars in losses tied to housing. Most banks likely have homeowners with home-equity lines of credit (HELOCs) nearing end-of-draw within their portfolio, as more than $236 billion remain outstanding on loans originated between 2004 and 2007. The reality is many consumers are unprepared to repay their HELOCs. In 2014, borrowers who signed up for HELOCs in 2004 were 30 or more days late on $1.8 billion worth of outstanding balances just four months after principal payments began, reported RealtyTrac. That accounts for 4.3 percent of the balance on outstanding 2004 HELOCs. In practice, this is what an average consumer faces at end-of-draw: A borrower has $100,000 in HELOC debt. During the draw period, he makes just interest-only payments. If the interest rate is 6 percent, then the monthly payment is $500. Fast forward 10 years to the pay-down period. The borrower still has the $100,000 debt and five years to repay the loan. If the interest rate is 6 percent, then the monthly payment for principal and interest is $1,933 – nearly four times the draw payment. For many borrowers, such a massive additional monthly payment is unmanageable, leaving many with the belief that they are unable to repay the loan. The Experian study also revealed consumer behaviors in the HELOC end-of-draw universe: People delinquent on their HELOC are also more likely to be delinquent on other types of debt. If consumers are 90 days past due on their HELOC at end of draw, there is a 112 percent, 48.5 percent and 24 percent increase in delinquency on their mortgage, auto loan and credit cards, respectively People with HELOCs at end-of-draw are more likely to both close and open other HELOCs in the next 12 months That same group is also more likely to open or close a mortgage in the next 12 months. Now is the time to assess borrowers’ ability to repay their HELOC, and to give them solutions for repayment to minimize their payment stress. Identify borrowers with HELOCs nearing end of term and the loan terms to determine their potential payment stress Find opportunities to keep borrowers with the best credit quality. This could mean working with borrowers to extend the loan terms or providing payment flexibility Consider the opportunities. Consumers who have the ability to pay may also seek another HELOC as their loan comes to an end or they may shop for other credit products, such as a personal loan.

Fraudsters invited into bank branches The days of sending an invitation in the mail have for the most part gone by the wayside. Aside from special invitations for weddings and milestone anniversaries, electronic and email invitations have become the norm. However, one major party planner has refused to change practices — banks inviting fraudsters into their banking centers. As a fraud consultant I have the privilege of meeting many banking professionals, and I hear the same issues and struggles over and over again. It’s clear that the rapid increase of fraudulent account-opening applications are top of mind to many. What the executives making policy don’t realize is they’re facing fraud because they’re literally inviting the fraudsters into their branches. Think I’m exaggerating? Let me explain. I often encounter bank policymakers who explain their practice of directing a suspicious person into a banking center. Yes, many banks still direct applicants who cannot be properly verified over the phone or online into their banking center to show proof of identity. Directing or inviting criminals into your bank instead of trying to keep them out is an outdated, high-risk practice — what good can possibly come of it? The argument I typically hear from non-fraud banking professionals: “The bad guys know that if they come into the bank we will have them on film.” Other arguments include that the bad guys are not typically bold enough to actually come into the banking center or that their physical security guards monitor high-traffic banking centers. But often that is where bank policies and employee training ends. Based on my years of experience dealing with banks of all sizes, from the top three global card issuers to small regional banks, let me poke a few holes in the theory that it is a good deterrent to invite perpetrators into your banking center. Let’s role-play how my conversation goes: Me: “When an underwriter with limited fraud training making the decision to direct a suspicious applicant into a banking center, what is the policy criteria to do so?” Bank policymaker: (typical response) “What do you mean?” Me: “What high-risk authentication was used by the underwriter to make the decision to extend an invitation to a high-risk applicant to come into the banking center? If the applicant failed your high-risk authentication questions and you were not able to properly identify them, what authentication tools do the branch managers have that the underwriters do not?” Bank: “Nothing, but they can usually tell when someone is nervous or seems suspicious.” Me: “Then what training do they receive to identify suspicious behaviors?” (You guessed it …) Bank: “None.” (I then switch to the importance of customer experience.) Me: “How do you notify the banking center in advance that the suspicious applicant was invited to come in to provide additional verification?” Bank: “We do not have a policy to notify the banking center in advance.” Me: “What is considered acceptable documentation? And are banking center employees trained on how to review utility statements, state ID cards, drivers’ licenses or other accepted media?“ Bank: “We do not have a list of acceptable documentation that can be used for verification; it is up to the discretion of the banking center representative.” Me: “How do you ensure the physical safety of your employees and customers when you knowingly invite fraudsters and criminals into your banking center? How do you turn down or ask the suspicious person to leave because they do not have sufficient documentation to move forward with the original application for credit? If a suspicious person provides your employee with a possible stolen identification card, is that employee expected to keep it and notify police or return it to the applicant? Are employees expected to make a photocopy of the documentation provided?” The response that I usually receive is, “I am not really sure.” I hope by now you are seeing the risk of these types of outdated practices on suspicious credit applications. The fact is that technology has allowed criminals to make fairly convincing identification at a very low cost. If employees in banking centers are not equipped, properly trained, and well-documented procedures do not exist in your fraud program — perhaps it’s time to reconsider the practice or seek the advice of industry experts. I have spent two decades trying to keep bad guys out of banks, but I can’t help but wonder — why do some still send open invitations to criminals to come visit their bank? If you are not yet ready to stop this type of bad behavior, at the very least you must develop comprehensive end-to-end policies to properly handle such events. This fraud prevention tactic to invite perpetrators into banks was adopted long before the age of real-time decisions, robust fraud scores, big data, decision analytics, knowledge-based authentication, one-time passcodes, mobile banking and biometrics. The world we bank in has changed dramatically in the past five years; customers expect more and tolerate less. If a seamless customer experience and reducing account-opening and first-party fraud are part of your strategic plan, then it is time to consider Experian fraud solutions and consulting.

Time heals countless things, including credit scores. Many of the seven million people who saw their VantageScore® credit scores drop to sub-prime levels after suffering a foreclosure or short sale during the Great Recession have recovered and are back in the housing market. These Boomerang Buyers — people who foreclosed or short sold between 2007 and 2014 and have opened a new mortgage — will be an important segment of the real estate market in the coming years. According to Experian data, through June 2016 roughly 800,000 people had boomeranged, with Los Angeles, Phoenix, and Sacramento housing the most buyers. Some analysts believe more than three million Americans will become eligible for a home over the next three years. Are potential Boomerang Buyers a great opportunity to boost market share or a high risk for a portfolio? Early trends are positive. The majority of Boomerang Buyers who opened mortgages between 2011 and June 2016 are current on their debts. An Experian study revealed more than 29 percent of those who short sold have boomeranged, and just 1.5 percent are delinquent on their mortgage —falling below the national average of 2.8 percent. This group is also ahead of or even with the national average for delinquency on auto loans (1.2 percent vs. the national average of 2.2 percent), bankcards (3 percent vs. 4.3 percent) and retail (even at 2.7 percent). For those Boomerang Buyers who had foreclosed, the numbers are also strong. More than 12 percent have boomeranged, with just 3 percent delinquent on their mortgage. They also match or are below national average delinquency rates on auto loans (1.9 percent) and bankcards (4.1 percent), and have a slightly higher delinquency rate for retail (3.5 percent). Due to their positive credit behaviors, Boomerang Buyers also have higher VantageScore® credit scores than before. On average, the overall non-boomerang group’s credit score sunk during a foreclosure but went up 10 percent higher than before the foreclosure, and Boomerang Buyers rose by nearly 14 percent. For people who previously had a prime credit score, their number dropped by nearly 5 percent, while those who boomeranged returned to the score they had prior to the foreclosure. By comparison, the overall non-boomerang and boomerang group saw their credit score drop during a short sale and increase more than 11 percent from before the short sale. For people who previously had prime credit, they dropped 2 percent while those who boomeranged were almost flat to where they were before the short sale. Another part of the equation is the stabilized housing market and relatively low loan-to-value (LTV) limits that lenders have maintained. In the past, borrowers most often strategically defaulted on their mortgages when their LTV ratios were well over 100 percent. So as long as lenders maintain relatively low LTV limits and the housing market remains strong, strategic default is unlikely to re-emerge as a risk.

Experian estimates card-to-card consumer balance transfer activity to be between $35 and $40 billion a year, representing a sizeable opportunity for proactive lenders seeking to grow their revolving product line. This opportunity, however, is a threat for reactive lenders that only measure portfolio attrition instead of working to retain current customers. While billions of dollars are transferred every year, this activity represents only a small percentage of the total card population. And given the expense of direct marketing, lenders seeking to capitalize on and protect their portfolio from balance transfer activity must leverage data insights to make more informed decisions. Predicting a consumer’s future propensity to engage in card-to-card balance transfers starts with trended data. A credit score is a snapshot in time, but doesn’t reveal deep insights about a consumer’s past balance transfer activity. Lenders that rely only on current utilization will group large populations of balance revolvers into one bucket – and many of these individuals will have no intention of transferring to another product in the near future. Still, balance transfer activity can be identified and predicted by utilizing trended data. By analyzing the spend and payment data over time to see when one (or multiple) trade’s payment approximately matches another trade’s spend, we have the logic that suggests there has been a card-to-card transfer. What most people don’t realize is that trended data is difficult to work with. With 24 months of history on five fields, a single trade includes 120 data points. That’s 720 data points for a consumer with six trades on file and 72,000,000 for a file with 100,000 records, not to mention the other data fields in the file. It’s easy to see why even the most sophisticated organizations become paralyzed working with trended data. While teams of analysts get buried in the data, projects drag, costs swell, and eventually the world changes as rates climb and fall. By the time the analysis is complete, it must be recalibrated. But there is a solution. Experian has developed powerful predictions tools that combine past balance transfer history, historical transfer amounts, current trades carried and utilized, payments, and spend. Combined, these data fields can help identify consumers who are most likely to transfer a balance in the future. With Experian’s Balance Transfer Index the highest scoring 10 percent of consumers capture nearly 70 percent of total balance transfer dollars. Imagine the impact on ROI of reducing 90 percent of the marketing cost of your next balance transfer campaign and still reaching 70 percent of the balance transfer activity. Balance transfer activity represents a meaningful dollar opportunity for growth, but is concentrated in a small percentage of the population making predictive analytics key to success. Trended data is essential for identifying those opportunities, but financial institutions must assess their capabilities when it comes to managing the massive data attached. The good news is that regardless of financial institution size, solutions now exist to capture the analytics and provide meaningful and actionable insights to lenders of all sizes.

The pendulum has swung again. The great recession brought a glacial freeze to access to capital. The thaw brought rapid, frictionless underwriting with an almost obsessive focus on growth and customer experience. Enter Marketplace Lenders and their more “flexible” approach to credit risk assessment. While much good has come from this evolution in financing, new challenges have surfaced – especially as it pertains to fraud prevention and credit risk management. Stacking has emerged as a particularly knotty problem in the small business lending space. Applicants have the opportunity to apply for and be approved for multiple loans in a matter of days or even hours.   Technology allows for underwriting that is at least somewhat automated and depositing often occurs within hours of approval. The speed of fulfillment is a boon for small businesses. However, it also makes it possible to be approved and draw down funds on multiple loans in quick succession. Core underwriting metrics, such as debt-to-income ratios and cashflow, are unreliable in the face of ratcheting debt from concurrent online business loans. This situation occurs because the window between the approval of the loan and delivery of the funds is much shorter than the timeframe to report the loan to credit reporting agencies and other third-party data suppliers. Not all lenders report small business loans, further compounding the problem.  Lenders’ risk and pricing strategies are hamstrung in the face of stacking, whether intentional on the part of the small business or not. If a struggling small business applies for credit and receives multiple loan offers, should we rely on their ability to resist the temptation to accept them all and use the funds wisely? No. The burden rests squarely on the credit provider to proactively address the problem. Technology-enabled frictionless underwriting underpins the online consumer loan space and facilitates a similar, yet subtly different stacking problem.  There are a large number of loan providers, with a spectrum of risk appetites and pricing strategies. This all but ensures that a consumer has access to additional loans at an ever-increasing interest rate. The underlying assumption, among the more mainstream, lower-rate providers, is that the consumer is disclosing all of their obligations – including any recent loans.  Although reporting in the consumer space is more robust and timely, it is still possible for an applicant to quickly access and draw funds on several loans within a very short timeframe, making it difficult for loan providers to get a full and complete picture of their capacity to repay the loan. The situation is further complicated by lenders at the higher risk, higher rate end of the market whose business models are structured to allow for, and perhaps even encourage, stacking by the consumer. Fortunately, there are a number of steps lenders can take to improve the situation: Contribute credit data to the credit reporting agencies. Know your customer, their industry, their market and underwrite appropriately. Develop a tailored underwriting approach that achieves a balance between frictionless customer experience and prudent credit and risk assessment. All applicants are not equal, and some require additional scrutiny and more time to underwrite. Understand the drivers and indicators of stacking. The latter point is worth emphasizing. The time to address stacking is prior to funding. This requires the lender to anticipate, identify and pre-empt stackers. There is no 100 percent foolproof remedy.  However, lenders can stack (pun-intended) the odds in their favor. For example, if an existing loan has a high balance and is delinquent, might that be an indicator of a propensity to stack? What if the business owner has applied for multiple loans, resulting in multiple inquiries, over a 45-day period? A proactive, data-driven anti-stacking strategy can yield positive results, reducing delinquency and losses. In combination with consistent comprehensive reporting to the bureaus, it can go a long way toward reducing the risk posed by this largely invisible threat.

As credit behavior and economic conditions continue to evolve, using a model that is validated regularly can give lenders greater confidence in the model’s performance. VantageScore® Solutions, LLC validates all its models annually to promote transparency and support financial institutions with model governance. The results of the most recent validation demonstrate the consistent ability of VantageScore® to accurately score more than 30 million to 35 million consumers considered unscoreable by other models — including 9.5 million Hispanic and African-American consumers. The findings reinforce the importance of using advanced credit scoring models to make more accurate decisions while providing consumers with access to fair and equitable credit. >> VantageScore® Annual Validation Results 2016 VantageScore® is a registered trademark of VantageScore Solutions, LLC  

A recent national survey by Experian revealed opportunities for businesses to build relationships with future homebuyers before they’re ready to obtain a loan. Insights include: 35% of future buyers said they don’t know what steps to take to qualify for a larger loan 75% of future buyers are not preapproved for a home loan 29% of those surveyed would purchase a more expensive home if they had better credit and could qualify for a larger loan A large portion of near-future homebuyers are millennials. Building relationships with this generation now will benefit financial institutions in the future. >> White paper: Building lasting relationships with millennials

 All customers are not created equally – at least when it comes to one’s ability to pay. Incomes differ, financial circumstances vary and economic challenges surface. Lost job. Totaled car. Unplanned medical bills. Life happens. Research conducted by a recent Bankrate study revealed  just 38 percent of Americans said they could cover an unexpected emergency room visit or a $500 car repair with available cash in a checking or savings account. It’s a scary situation for individuals, and also a source of stress for the lender expecting payment. So what are the natural moments for a lender to assess “ability to pay?” Moment No. 1: When prepping for a prescreen campaign and at origination. Many lenders leverage an income estimation model, designed to give an indication of the customer’s capacity to take on additional debt by providing an estimation of their annual income. Within the model, multiple attributes are used to calculate the income, including: Number of accounts Account balances Utilization Average number of months since trade opened Combined, all of these insights determine a customer’s current obligations, as well as an estimation of their current income, to see if they can realistically take on more credit. The right models and criteria on the front-end – whether used when a consumer applies for new credit or when a lender is executing a prescreen campaign to acquire new customers – minimizes the risk for default. It’s a no-brainer. Moment No. 2: When a customer is already on your books. As the Bankrate study mentioned, sudden life events can send some customers’ lives into a financial tailspin. On the other hand, financial circumstances can change for the better too. Aggressively paying down a HELOC, doubling down on a mortgage, or wiping out a bankcard balance could signal an opportunity to extend more credit, while the reverse could be the first signs of payment stress. Attaching triggers to accounts can give lenders indications on what to do with either scenario, helping to grow a portfolio and protect it. Moment No. 3: When an account goes south. While a lender hates to think any of its accounts will plummet into collections, sometimes, it’s inevitable. Even prime customers fall behind, and suddenly financial institutions are faced with looking at collections strategies. Where should they place their bets? You can’t treat all delinquent customer equally and work the accounts the same way. Collection resources can be wasted on customers who are difficult or impossible to recover, so it’s best to turn to predictive analytics and a collections scoring strategy to prioritize efforts. Again, who has the greatest ability to pay? Then place your manpower on those individuals where you can recover the most dollars. --- Assessing one’s ability to pay is a cornerstone to the financial services business. The quest is to find the sweet spot with a combination of application data, behavioral data and credit risk scoring analytics.  

His car, more than 10 years old and not worth salvaging, was in the shop again. Time to invest in something new – or at least “new-ish.” He headed to a local dealership, selected a practical model and applied for financing. “We can’t give you a loan,” said the manager. “Your income is not high enough, but perhaps if you bring in a co-signer ...” Denied. Her college degree hung on the wall of her childhood bedroom. In the months since she celebrated graduation with family and friends, she landed a job, but not one providing enough income to cover rent, a car payment and her hefty student loan payments. “I didn’t realize my payments would be so high,” said the woman. “I don’t know how I’ll ever climb out from under this debt and start my life.” Stalled. His attempt at applying for a bankcard, much needed to begin the journey of establishing credit in the country, was met with failure. “We can’t find any credit history on you,” says the lender. “Try again in the future.” Invisible. These stories are all too common in America. A lack of financial education, coupled with a few poor choices, can derail an individual’s financial trajectory. More light has certainly been shone on the topic of financial education and the importance of making smart credit decisions from a young age, but there is no nationwide financial education program offered in schools, and many parents feel ill-equipped to handle the task. Consider a few of these numbers: 71 percent of college grads recently surveyed by Experian said they did not learn about credit and debt management in college, giving their schools an average grade of “C” when it comes to preparing them to manage credit and debt after college The latest "State of Credit" revealed the average debt per consumer is $29,093 39 percent of newlyweds say credit scores is a source of stress in their marriage Money management is tough, and we expect people to just figure it out. But clearly, that’s not working. So we need to think about the world of credit differently. As Experian says, we need to treat it as a skill. We need to practice and learn and adjust. As you get better at credit, it opens doors, creates opportunities, and enables people to live the lives they wish to live. Suddenly, you can get the car loan, move out, have access to credit cards, and manage it all responsibly. In other words, you claim financial health. On the other hand, if you don’t work at this skill, a lack of financial health ensues. Unruly amounts of debt, irregular income and sporadic savings create stress, resentment and pain. Increasingly, more financial institutions are boosting efforts to educate about credit. Schools are exploring curriculum to talk finances and inject real-life money management scenarios into everyday lessons. Millennials are seeking transparency around credit transactions. The more financially healthy consumers we have in this country, building credit skills, means overall economies will grow. So yes, financial health matters. It matters to individuals, to lending institutions, to retailers and to communities big and small. Building those credit skills is essential. Your health depends on it.

According to a national survey by Experian, college students may be receiving their degrees, but their financial management knowledge still needs some schooling. The survey reveals some troubling data about recent graduates: Average student loan debt is $22,813 31% have maxed out a credit card 39% have accepted credit card terms and conditions without reading them Learning to manage debt and finances properly is key to young adults’ future financial success. Since students aren’t receiving credit and debt management education in college, they need to educate themselves proactively. Credit education resources are available on Experian's Website. >> Experian College Graduate Survey Report