68% of Americans destroy credit before age 30: Survey

[gdale6]

Have you made mistakes regarding your credit in the past? That could haunt you ... for a long time.

A whopping 68 percent of Americans make at least one major financial mistake, or "credit fumble," before turning 30, leading to a negative mark on their credit report, according to a Credit Karma survey.

These mistakes include overspending on credit cards, missing payments, defaulting on a loan or having an account sent into collections, the survey found.

http://www.cnbc.com/2016/01/25/nearly-70-percent-of-americans-destroy-their-credit-before-turning-30...

[14Fiesta]

Thanks for posting!

I'm holding out and trying my hardest to remain in the 32% that are squeaky clean. 20 years down, 10 to go!

[Anonymous]

That's me! I started with a Sears Card I put $100 on and never paid at 18. Then I decided to ignore some student loans after paying them half way down at 24. I started caring about my credit 2 years ago (now 39) and wish I had done it sooner. I am amazed that, since learning as much as I can, how ignorant people are about credit and how it works. Even people I know with good credit don't really know the ins and outs of it. It's amazing to me how easy something can be to get, but how hard it can be to get rid of. 

[ddemari]

I for sure can relate with that article. A little over 10 years at 18 I charged up 25k in cc debt by 19 years old. I had to file bankruptcy. then I spent about 4-5 years doing nothing with credit. Then did something stupid and let 2 cards charge off in 2008. For almost the past 11 years CO's, bankruptcy, and collections sat on my reports. The ramifications of those actions seemed like they would never go away. Paying your credit cards on time and never letting anything go into collections or default is something I have learned and will strive to never happen again. Good Article! 

[Callandra]

If the percentage is accurate, it's not surprising at all given the lack of credit education (and we live in a I want it NOW society).

[Thomas_Thumb]

I suspect this is a biased survey - not balanced with the general population [e.g. those with good credit that are not focused on securing more credit cards less likely to participate the survey]. News media tends to sensationalize and apply data selectively. 

If someone were to do a detailed search on the subject there are likely other studies are floating out there with vastly different results.

News media => pick a story and then find data & articles to support your position.  

I tend to be cynical when confronted with "objective reporting" in the news.

Edit add: OK - I did some searching to look for other credit studies. No luck on age specific studies. However, if a third of consumers with credit files have debts in collection then 68% destroying credit before age 30 is more believable. Still seems high but it is what it is. I suspect college debt plays a role.

https://www.washingtonpost.com/news/wonk/wp/2014/07/29/a-third-of-consumers-had-debts-in-collections...

[Anonymous]

Count me among their numbers. I think they're far too willing to give generous amounts of credit to people who are new to the workforce, new to credit and have no experience or knowledge in managing money. I think they need to be a bit more cautious with new folks, and maybe that number will go down. I will say that right now I probably have the best credit I've had since my 20s, and I'm in my 40s now.

[Anonymous]

Yes, I too am one of those Americans ... however I will be ( & am) one several Americans that will change their life around

[Anonymous]

This isn't shocking, considering how broad their definition of a major mistake is, and how quickly debts can go to collections. I went to the ER just after turning 18, and neglected to pay my bill for two months. I was unemployed and going to college, and I didn't know anything about credit or the ramifications of not paying the bill immediately. It went to collections after these two months. I paid it then. Was that a major credit mistake? Well, kind of, but not really. I managed to drive a hand-me-down car for 5 years and had no use for credit. After I realized I actually had a credit score after getting my identity stolen, I was interested in building it up in anticipation for an auto loan as my car started to crumble. I started at about 670 and raised it to 735 after 8 months. The collection was only reported by one agency, but it hasn't caused me much trouble. I was only denied for one credit card because of it, but I am now carrying that card in my wallet. I made a mistake, but my credit is far, far from being "destroyed." I'd say what's destroying my credit right now is the fact that I have very little, and a short history. Articles and figures like these spread fear about credit and actually can lead to more "destruction."

I do definitely agree that we NEED credit and financial education in high schools, though. Then, I could've avoided my mistake and started building credit even sooner. Of course, whenever I want to celebrate getting a new card with someone I know, they're all like, "OH NO DANGEROUS" because they immediately equate credit with danger. Most people I know max out their cards so they can purchase whatever they want. They don't realize that credit cards are a valuable tool for both security and proving to future lenders that you can manage credit. They see it as either an "emergency" fund (very widespread) or a means to obtain things they couldn't otherwise. Your savings account is your emergency fund... it don't understand how spending $3,000 you don't have on a credit card to help you in an emergency and then paying massive amounts of interest makes financial sense.

[Revelate]

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@Anonymous wrote:

This isn't shocking, considering how broad their definition of a major mistake is, and how quickly debts can go to collections. I went to the ER just after turning 18, and neglected to pay my bill for two months. I was unemployed and going to college, and I didn't know anything about credit or the ramifications of not paying the bill immediately. It went to collections after these two months. I paid it then. Was that a major credit mistake? Well, kind of, but not really. I managed to drive a hand-me-down car for 5 years and had no use for credit. After I realized I actually had a credit score after getting my identity stolen, I was interested in building it up in anticipation for an auto loan as my car started to crumble. I started at about 670 and raised it to 735 after 8 months. The collection was only reported by one agency, but it hasn't caused me much trouble. I was only denied for one credit card because of it, but I am now carrying that card in my wallet. I made a mistake, but my credit is far, far from being "destroyed." I'd say what's destroying my credit right now is the fact that I have very little, and a short history. Articles and figures like these spread fear about credit and actually can lead to more "destruction."

I do definitely agree that we NEED credit and financial education in high schools, though. Then, I could've avoided my mistake and started building credit even sooner. Of course, whenever I want to celebrate getting a new card with someone I know, they're all like, "OH NO DANGEROUS" because they immediately equate credit with danger. Most people I know max out their cards so they can purchase whatever they want. They don't realize that credit cards are a valuable tool for both security and proving to future lenders that you can manage credit. They see it as either an "emergency" fund (very widespread) or a means to obtain things they couldn't otherwise. Your savings account is your emergency fund... it don't understand how spending $3,000 you don't have on a credit card to help you in an emergency and then paying massive amounts of interest makes financial sense.

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Good post, but on your last point if you have an emergency and you need money right now, paying the 3K on a CC is better than not having the 3K to fund whatever it is you need... it is an emergency after all.

If people are mistaking "want" for "emergency" that's a different issue not intrinsic to credit cards I think .

I saw a Youtube recently "Don't Stay in School" and while I'm relatively well educated (at least from HS) I found myself agreeing with his main point; some practical education and that would include credit, wouldn't be remiss.

SMH at a 2 month collection, that's, absurd.