Although young adults in their 20s and early 30s have been cutting back on most forms of debt -- except student loans -- an analysis by Experian suggests that they still could manage their debt more responsibly. The credit reporting bureau analyzed more than 10 million credit files and Vantage credit scores for its findings.
Although Millennials have the fewest number of credit cards and the lowest average balance on them, the research showed that they also have the lowest credit scores and a relatively high incidence of late payments. Younger adults tend to have shorter credit histories simply because of their age and because the age of an account factors into a credit score.
A challenging economy and higher unemployment among younger adults also makes it tougher to stretch their income and may force them to turn to credit in an emergency, which can reduce savings and financial flexibility, explains Joe Valenti of the Center for American Progress. Factors that influence a credit score generally include the number and age of a consumer's accounts, balances, payment history, and use of revolving credit relative to credit limit. Paying bills on time, even if just a minimum payment on a credit card, can improve a credit score.