Financial Education

If you asked me how I’d feel about taking a personal finance class in school when I was growing up in a small town near St. Louis, Missouri, I probably would’ve told you it sounds better than trigonometry and chemistry on the list of classes I had to take. They weren’t my best subjects.  Now that I’m a few years older, and I hope a bit wiser, I can promise you I would answer that question a lot differently if asked today.   I now know there are some instances in life where it makes sense to learn by making mistakes, but money is not one of them. Like many people, I had my first experience with credit and money management when I took out a student loan. I was the first person in my family to go to college, so we didn't know what we were getting ourselves into. Unfortunately, I learned the impact of poor borrowing habits and high interest rates the hard way – for many, many years.  Learning about money, and especially credit, by making mistakes can lead to long term damage to your financial health, which is one of the many reasons I’m passionate about financial education in schools today. Effective financial education programs will help young adults be more successful older adults.   We know that if a young person has a basic understanding of how credit works, they tend to be less likely to overextend their credit card use. It’s one of the reasons Experian was the first in its industry to invest in youth financial education, as a founding partner of the Jump$tart Coalition for Personal Financial Literacy two decades ago. Over that time, we’ve continued to support the organization.   Eleven years ago, we launched the Jump$tart National Educator Conference that offers teachers around the country tools and information about personal finance to take back to their classrooms. Last year, more than 350 teachers attended the conference. This year alone they will teach more than 48,000 students across the country about personal finance. It's been a very powerful partnership.  While we’ve made a lot of progress in educating our youth about personal finance, there is still a lot of work to do. As of this year, 21 states across the U.S. require high school students to take a personal finance course, an increase of 4 states since 2018, according to a recently released report from the Council for Economic Education.   This report also reinforced the idea that students who receive financial education borrow more sensibly. They tend to look at low-cost over high-cost financing options and they are more likely to apply for aid, receive grants and accept federal loans, which all tend to be lower interest forms of borrowing. Applying for grants or low-cost financing options could have made a serious impact on my financial health as a young adult. Considering student loan debt has now reached $1.56 trillion, it’s time we all start paying more attention to the positive impact financial education can have on our young people as well as our economy.   Not only is financial education in schools the right thing to do, we know it’s something students want. We recently surveyed a group of more than 500 high school graduates to learn what they want when it comes to finance and credit education. Some key findings include:   49% of Gen Z consumers surveyed said they found financial topics to be somewhat interesting or very interesting—and 11% of them even said they loved learning about them.  Only about one-third—36%—of Gen Z consumers said they had taken a class on a financial topic, and among that group, many of them still had looming financial questions.  Of the 64% that had never taken a financial education class, 43% reported wanting to learn to save money, 38% wanted to learn how to manage their expenses, and another 36% said they wanted to take a class that taught them how to file their taxes.  A large majority—76%—of Gen Z consumers said that they thought their high school should have offered a class on managing finances.  So, what can we do to help ensure our young people grow up to be financially healthy adults?   If you’re a parent and want to find out if your children’s school offers financial education, head to https://checkyourschool.org/. If your school is not on the list, learn how you can become engaged in this initiative by working with JumpStart.   In the meantime, you can also find free, educational resources on our website to help teach your children about personal finance and credit. We have prepared a simple lesson plan, presentations and online brochures that are free to download, and you can find answers to commonly asked questions about personal finance, credit, fraud, identity theft and more on our Ask Experian blog and our weekly Twitter Credit Chats.   

Experian's game plan is focused on improving the financial health of consumers everywhere.  As part of that journey, we recently went to Miami, Florida, ahead of the Big Game, with pro football legend and American Ninja Warrior host Akbar Gbajabiamila to discuss how Experian Boost is helping millions increase their credit scores. Gbajabiamila, author of “Everyone Can be a Ninja,” is passionate about helping people develop a financial game plan and he understands having a good credit score is a key component of good financial health. “There’s something I’m truly passionate about and it’s financial literacy. Credit scores are something so many people hear about, but they don’t know how to interact with them. Experian has a platform that allows people to personally impact their credit scores. You can literally take your everyday utility bills, add them into your Experian credit report and get credit for that,” said Gbajabiamila. The days leading up to the Big Game provided an exciting time for Gbajabiamila to share with consumers across the country about how Experian Boost is instantly improving credit scores and helping people take control of their credit. In fact, Akbar’s take on the important role credit scores play in financial health was enthusiastically received by many on-air hosts who echoed the need to speak about it more frequently. As Akbar shared, “Whether you’re a professional athlete or a fan of professional sports, it’s important that you pay attention to your credit report.  And Experian Boost is the right step.” View highlights from our trip to Radio Row in the video below and learn more about Experian Boost by visiting www.Experian.com/BoostAmerica.

As 2019 comes to a close, many people are outlining their goals for the new year. For some people, this means making plans to get healthier, reconnect with old friends or find a new job. For many, improving financial health comes in at the top of the list. In fact, we know saving more is a top resolution for 50% of people and one in three want to improve their credit scores in 2020.   Saint Exupery once said, “a goal without a plan is just a wish” and he was right. When setting any goal, it’s important to put a plan in place. An essential first step toward creating an effective plan of action is getting a grasp of your current situation. The same is true for creating and achieving goals related to improving your financial health.   Each year, we take a look at how Americans across the country are managing their credit to help people understand the purpose and impact of their credit scores. Our annual State of Credit report highlights average credit scores, debt levels and delinquency rates of people across America. In releasing this report, we hope to give people insight to help them make more informed decisions about credit use as we prepare to head into a new decade.   Our latest report showed the average credit score hit an eight-year-high at 682. While people are taking on slightly more credit card, mortgage and nonmortgage debt year-over-year, delinquency rates are decreasing on average and utilization remains consistent at 30%, which means people are responsibly managing the debt they’re carrying.   If your credit score is lower than you’d like, or if you’re looking for ways to maintain a positive credit history and improve your financial health, here are five ways you can better your financial standing in 2020:   Check your credit report and credit score. Your credit report serves as your financial references. Take care of your credit report and you will take a big step toward better financial health. Credit scores play an important role in your financial journey. They translate the information in your credit report into a number reflecting the risk of doing business with you.  Check your credit score at the same time you check your credit report. When you get credit score you should receive an explanation of what the score means and what from your credit report is most affecting it. This is an important step to gauge your current standing and to develop a plan to improve your credit report and scores. You can get a free credit report once every 12 months from Experian by visiting www.annualcreditreport.com or through the Experian app.  Keep your utilization rate low.  Your utilization rate, or balance-to-limit ratio, should never exceed 30 percent of your credit limit. At a maximum, your total credit card balances should not be more than 30 percent of your total credit card limits, and you don’t want any one card to have a balance of more than 30 percent of the limit of that one card. Both can hurt you.  This doesn’t mean that you want to get your balances up to 30 percent and keep them there. The lower your utilization rate, the better. People with the best credit scores have utilization rates of less than 10 percent. As you head into 2020, focus on reducing your credit card balances and keeping your balances low.   Use the tools available to you like Experian Boost. If you’re paying your cell phone, cable, satellite and utility payments on time, you can use our free tool, Experian Boost, to potentially increase your credit scores in the new year. We see scores improve for two out of three people who use Experian Boost with an average increase of more than 10 points.   Plan ahead for major credit purchases. For many, the start of a new year can mean a new car, a new home and more. When preparing to make a major purchase, it is critical to demonstrate financial stability in the three to six months leading up to it. While it is important to optimize your scores before purchasing a house or a car, be careful not to make too many big moves right before your purchase.  Closing accounts or applying for new credit could temporarily reduce your scores, so don’t open any new accounts during the months leading up to your purchase. Wait to close accounts or apply for new ones until after you have the keys to that car or house in hand.  Pay on time, every time. Nothing will hurt your credit score more than missed or late payments. To maintain a positive credit history, make a plan to catch up on any missed payments. Enrolling in autopay can be a helpful way to stay on a payment schedule that works for you.   Remember, credit can be a financial tool, but debt is a financial problem. Create your financial game plan for 2020 and use these tips to prepare for a financially healthy new year. If you need help along the way, visit the Ask Experian blog or tune into our weekly Credit Chat.    

For many of us, the holidays are an exciting time filled with family, friends and a flurry of gift giving and receiving. Unfortunately, this time of year can also put a strain on finances and your financial health. In fact, we see many people start a new holiday season while they’re still working to pay off debt from the year before. Each year, our holiday spending survey takes a look at how people are feeling about holiday spending, how much they plan to spend and their financial goals for the new year. We found shoppers plan to spend 75% more this year on holiday spending than in 2018 with an average of $1,649, and 63% agree holiday expenses affect their finances negatively. We also found 38% of the people we spoke to are feeling stressed as the holiday season approaches. Getting a spending game plan in order now can help protect your financial health and keep your holidays merry and bright. Here are three ways to stay financially fit this holiday season and beyond: Create your holiday spending plan. Setting a budget is an important first step to ensure you’re not spending more than you can afford, but your holiday spending plan should include more than that. Think about who you need to shop for, where you’re going to shop and when you’re going to shop. Our survey showed the lure of a good deal can be hard for some to resist. In fact, one in five Americans said they would risk becoming a victim of identity theft for a good deal. Having a plan in place can help you avoid risky spending behavior while scrambling for last minute gifts. So, make that list and check it twice. Use credit as a financial tool. All year and especially around the holidays, I like to remind people that credit can be a financial tool, while debt is a financial problem. We know that about 44% of people plan to use credit to pay for gifts, and it’s important to do so responsibly. After all, the bills always arrive in January. If you’re going to use credit to pay for gifts, make sure you have a plan for paying your balances off to avoid missing payments and increasing your utilization rate – two critical factors that can have a negative impact on credit scores. Additionally, we found one in four shoppers plan to open a new credit card this season. Opening one or two cards to take advantage of in-store discounts or cash back offers can be a useful way to save money during the holidays, but don’t overdo it. If you take advantage of too many rewards offers, you may find you’ve saved yourself right into debt. Prepare your credit for holiday shopping and the new year. Getting your credit ready for the holiday season and the new year should be part of your holiday spending plan. That way, if you do plan to apply for new credit this shopping season or in 2020, your credit is ready to work for you. Get a copy of your credit report to ensure there are no surprises and catch up an any missed or late payments. This is also the first holiday season you can use free tools like Experian Boost to improve your credit scores if you’re paying your telecom and utility payments on time. We see scores improve for two out of three users with an average boost of more than 10 points. If you have a limited credit history or a thin credit file, you may see an even bigger boost to your credit score. We know almost have of those we spoke to for our survey will try to improve their credit score before the start of the new decade and Experian Boost is proving to be a valuable tool for consumers looking to do just that.  There's often the temptation to overspend, but the best gift you can give yourself is being financially smart. My hope is these tips can help boost your holiday cheer while preparing you for a financially healthy new year.   Happy holidays.

Building a credit history takes time. Establishing a credit history early in life can help ensure you have access to affordable credit when you need it. The problem is that people tend to learn about credit and finances through trial and error. This is unfortunate because recovering from financial mistakes takes time, too. In fact, it could take years to rebound from one financial misstep. This trend is especially common for young adults who are just beginning to get their financial feet wet, and it’s one of the many reasons credit education and improving the financial health of consumers of all ages is core to our mission at Experian. As Director of Consumer Education and Advocacy, I get the opportunity to talk to a variety of students and young adults across the country on a regular basis. Millennials and Gen Z are often labeled slackers, but I don’t believe that for an instant. They experienced the financial crisis firsthand in their early years, and they really don’t want to repeat what their parents went through. Can you blame them, really? One thing we know for certain about young adults is they are very interested in learning as much as they can about money, finance and credit, and it’s our goal to be an educational resource to them. As the saying goes, you don’t know what you don’t know. We have a chance to give younger generations the information and tools to know more than previous generations did at their ages. Here are some of my favorite tried and true tips to help set young adults up for credit success: Start small and grow slowly. A secured account with a small credit limit can establish your credit history and help you start saving at the same time. Good credit and strong savings habits go hand-in-hand. You don't need a credit card with a high limit to have good credit. Use the credit you have wisely. Good credit scores are not about having a lot of credit, but rather about how you use the credit you have available. Make a small purchase each month and pay it in full. That will show you can use credit well without taking on debt. Use your cell phone to improve your credit. With Experian Boost, you can add positive telecom and utility payments to your credit history and possibly boost your credit score. In the past, failing to pay your utility or cell phone bills could hurt your credit, but paying on time didn't help. With Experian Boost, that's changed. Use technology to make managing your credit automatic. Millennials and Gen Zers are the most technologically savvy generations in our history. Use technology, such as online banking apps and credit management tools like the Experian app, to automate savings and payments, to alert you to potential fraud and to track your progress as you build your credit history. We know helping people better understand and access credit is a team effort, and we work closely with our advocacy networks to increase our impact. We recently joined the American Bankers Association to provide young adults with financial education. Leading up to Get Smart About Credit Day, we hosted a Facebook Live with Jeni Pastier, Director of Financial Education Programs for the American Bankers Association to address credit topics young adults typically don’t understand or know about at all. You can watch the full video here and find additional articles to get smarter about credit on the Ask Experian blog.

It’s an exciting time for all of us at Experian. When I became CEO, just over four years ago, we set a clear path to put an even greater focus on our relationship with consumers and how we can help them in their financial journey. Today, as we prepare to launch Experian Boost, we are marking a major milestone in that commitment. There are more than 100 million Americans who don't have fair access to credit today. These consumers are often overlooked by lenders and forced to rely on high interest credit cards and loans. Too often they find themselves stuck in a never-ending cycle in which the best of intentions and the desire for a better financial future clash with reality. At Experian, we know that a credit score is the gatekeeper to better financial opportunities. It can make or break people’s access to the very things that help them thrive in today’s economy like getting a loan for a family car or access to a credit card with a lower interest rate. Unfortunately, many consumers have credit files that are considered too “thin”. And while they may be paying their utility, mobile phone and cable TV bills on time month after month, this responsible behavior hasn’t been acknowledged or rewarded with a higher credit score. Experian Boost changes this scenario and give consumers the credit they deserve. As a business, we want to ensure that as many people as possible can access and participate in the financial system and we believe everyone deserves a fair shot at achieving their financial dreams. Today’s Experian Boost announcement drives our mission forward by giving consumers more control over their credit score. This industry-first online platform will give consumers an opportunity to instantly improve their credit scores by adding positive telecom and utility payment information directly into their credit profile. Experian Boost is free and will be accessible to every credit-active adult in America. We recently briefed Experian’s Consumer Council, a group of 12 leaders from organizations committed to helping consumers on their financial journey, on Experian Boost with great feedback. Here’s what one of the organizations, the Credit Builders Alliance, had to say: “Limited credit activity and history are key barriers for consumers to achieve their financial goals,” said Dara Duguay, executive director, Credit Builders Alliance. “We fully support initiatives that promote financial inclusion and think Experian Boost could play an important role in overcoming that barrier. We look forward to seeing how Experian’s new platform impacts consumers.” Innovations like this and the modernization of an industry don’t happen easily. I couldn't be prouder of our employees who have been working for past three years to make this platform a reality. We are pioneering a bright future for the world of credit with Experian Boost, a product which is emblematic of the innovation culture we foster at Experian. Experian has a fundamental purpose that is shared by colleagues around the world: to strive to be a champion for the consumer. With Experian Boost, we're bringing our purpose to life and we can’t wait to share it with you. To find out more about Experian Boost, please visit: experian.com/boost.

As the owner of one of those increasingly popular voice-controlled assistants, I get a weekly email from the supplier suggesting new things to ask it to do or help with. Rather conveniently, this week’s update arrived this morning and includes the suggestion: “[Hello], can you do maths?”  I use the word ‘conveniently’ because among the various tasks on my to-do list today is ‘write a short blog about numeracy’. So now I have an introduction. Like literacy, numeracy – understanding and being able to apply numbers – is a vital life skill. They are both key foundations of our education from the earliest of ages and go on to support opportunity and achievement throughout our schooling, into the world of work and beyond. Low levels of numeracy in adult life can be a major obstacle to success. Most employers require at least basic maths skills. And if you struggle with numbers, making successful financial decisions about the money that going to work generates will be very challenging. But this is the reality for many adults today. In the UK, almost half of us possess the maths skills expected of an 11 year old. This is according to National Numeracy, a charity that champions the importance of good numeracy and provides tools to help people improve. So when National Numeracy asked Experian to support the UK’s first National Numeracy Day on 16 May we were delighted to say yes. I’m certainly looking forward to working alongside a number of other big brands as well as numeracy ambassadors Rachel Riley and Martin Lewis. It’s a great fit for Experian, a company with a long track record of supporting initiatives designed to help people make successful decisions, particularly around personal finances. Our learning resource Values, Money & Me is already used in primary-school classrooms around the country to help cement good financial habits from an early age. Similarly, millions of adults track the health of their credit with the help of a free Experian account, and use the built-in eligibility features to secure better deals on financial products. Like others, we firmly believe that maths skills and financial success are closely linked, so we’re delighted to be helping support and promote National Numeracy Day. We’ll be encouraging as many people as possible to tackle the National Numeracy challenge and, where necessary, to take follow-up steps to brush up on their maths skills and, as a result we hope, improve their financial futures. Written by: James Jones, Head of Consumer Affairs, UK&I

Promoting a better understanding about how the credit economy works and improving financial awareness, so that people can take control of their financial situation with positive, proactive decisions, is absolutely fundamental to our business strategy. This is encapsulated through our financial education programmes. In partnership with Young Enterprise, we have created 28 Centres of Excellence for schools to support children’s financial education. And through Experian’s Values, Money & Me, we have created the UK’s first free online teaching resource to help children develop their financial knowledge and abilities. Credit Awareness Week is, then, a natural place for us to continue that focus. And to take that conversation more widely, to our industry partners, for us all to consider how we might find better ways of working, and drive better outcomes for our customers. There’s no doubt that we are living through a period of significant financial uncertainty. At times like this it is important that consumers are aware of all the options available to them from a financial perspective. And we believe your credit score is one of the first things you should look at. It’s perhaps surprising then that our annual Credit Awareness Week consumer survey found that public awareness of credit and how it can be used to help with day to day challenges still remains relatively low, despite some signs of improvement – potentially driven by the widespread availability of free score services. The percentage of people who said they know their current credit score went up from 22% to 26%, while 47% have ever checked their credit report, up from 45% last year. However, there is still much misunderstanding coming through. 39% of those surveyed wrongly believe their own credit score can be affected by a previous resident of their address having a poor credit score, while 14% think, incorrectly, that checking their own credit report and score has an impact on their credit rating. More than a quarter (26%) are also wrong to believe having a high income can affect their score, while 14% are incorrect to think checking their own score has an impact. The number of people who believe that the system needs to provide clearer explanation about how the decision was made when credit is refused has also increased. What the results of our poll tell me is that more needs to be done in promoting a better understanding about all the options available, like the existence of eligibility and comparison services which are designed to help empower people shop around for better deals and, where credit is concerned, avoid damaging their score while they do so. So there is work to do in building a better understanding about how credit works, which is something we are committed to and that’s why we are supporting this campaign. To help, Experian and Credit Strategy have launched an improved ‘credit refusal pathfinder’ [add hyperlink] tool, to help guide people who apply for credit and get turned down. I’d encourage everyone, even those of us who think we know this business inside out, to take a look at the tool. And, in the spirit of building greater trust and transparency with our customers, let’s take this opportunity to have a think about what we in the industry can do to make things clearer for people. Helping them understand how lending decisions are made and empowering them to take control of their financial situation and make better, sustainable choices through affordable access to finance.

  In the United Kingdom, the Financial Inclusion Commission has previously expressed concern that 31 percent of the adult population has experienced one or more signs of financial distress, such as regularly accruing overdraft charges and using credit to pay for essentials each month. While the Bank of England has warned U.K. households about the risk and effects of their alarming, yet growing, dependence on loans and credit cards, knowing how to manage debt successfully is a vital skill many lack. While most individuals do comfortably manage their debt repayments, many unexpectedly face tough times, especially following disruptive life events that complicate financial management. Since joining Experian from university in 1992, I have been involved in a number of developments and initiatives to help people better manage their money, particularly during difficult times. Years ago, I oversaw the launch of our first telephone helpdesk for the UK public, and today I still answer questions online and occasionally on the radio from individuals worried about their credit scores and loan payments. After years of one-on-one interactions, my team and I have discovered that the key to growing our capacity to serve the community is through partnerships. To provide more effective support for U.K. consumers, Experian began to partner with debt advice charities that give free and professional guidance to people, including about credit score issues. Experian’s role is to make sure debt advisors understand the nuances of credit reporting and credit scoring when talking to and helping their clients. We provide this support in a number of ways. In the last year alone, we have trained more than 600 debt advisors through workshops and seminars, and provided free credit reports to more than 60,000 individuals through debt counselling outlets. Additionally, we have used our insight and data consultancy services to help a number of charities better understand, engage with and support their clients, for example, by identifying their clients’ preferred communications channels. This has included the Money Advice Trust, which runs National Debtline, and StepChange Debt Charity, a leading UK debt counselling provider. Our partnerships within the debt advice sector have not only enabled us to support, educate and empower more consumers to reach their financial goals, but also helped Experian better understand consumers’ greatest fears and misconceptions when it comes to finances. I have enjoyed representing Experian for the past 25 years including working with a number of great organizations and really passionate individuals – so much so that I jumped at the opportunity to join the board of a new debt advice charity, The Debt Counsellors Charitable Trust, a couple of years ago which was very much focused on helping the most vulnerable people. The relationships I’ve developed with these intelligent, ambitious debt advice advisors and charities has really inspired and humbled me. They work tirelessly every day to ensure households in the U.K. can reach their financial milestones – including, importantly, when things go wrong – and I am grateful to be a part of this important network.   James Jones: Head of Consumer Affairs, U.K.