Welcome!

News Feed Item

BMO Harris Bank Survey Finds Four in 10 Millennials Believe Carrying a Credit Card Balance Will Improve Their Credit Score

CHICAGO, IL -- (Marketwired) -- 08/27/14 --


  • Across all ages, 30 percent believe carrying a balance will help their credit score
  • Only half of millennials check their credit score on an annual basis
  • BMO Harris suggests maintaining a score above 680, and provides advice on how to get there

According to a new survey from BMO Harris Bank about Americans and their understanding of credit, 39 percent of millennials (ages 18-34) believe that if they carry a balance on their credit card it will help improve their credit score. The findings indicated that while most Americans believe they have a solid understanding of what a good credit score is, there is confusion around attaining it.

Most Americans (80 percent) across all ages say they are knowledgeable about how to achieve a good credit rating. Half check their score once a year, while 30 percent check it every few years or less. One fifth don't know their score. Among millennials, 72 percent say they are knowledgeable, and 48 percent check their score every year. However, 27 percent check it every few years or less, and one quarter don't know their credit score.

On average, Americans believe a good credit score is 660. Among millennials that number drops to 625, while those aged 35-54 and 55+ believe a good score would be 675.

"The good news here is most Americans are not far off in what they believe is considered a good score, which we generally tell customers is in the 680-720 range. However, there's some room for improvement in terms of the frequency with which they check it," said Alex Dousmanis-Curtis, Head of Retail Banking, BMO Harris Bank. "Encouraging education around credit scores is a major focus for us, especially among the millennial population. A credit score stays with you as you go through your financial life, and can impact major decisions. Our bankers regularly work with customers to better understand their score better, and in some cases, get it where it needs to be to purchase that home or buy that car."

Americans were asked to identify a number of common credit score misconceptions as true or false. The following table indicates those who believed these inaccurate statements were true:


----------------------------------------------------------------------------
Statement                                              Total 18-34 35-54 55+
----------------------------------------------------------------------------
Your credit score improves if you carry a balance on   30%   39%   32%   18%
your credit card
----------------------------------------------------------------------------
Your credit score will immediately improve from better 64%   64%   69%   59%
behavior (such as reducing a balance)
----------------------------------------------------------------------------
Your level of education can affect your credit score   23%   19%   22%   27%
----------------------------------------------------------------------------
Checking your credit score can decrease your score     27%   34%   27%   19%
----------------------------------------------------------------------------
Your credit score is controlled by credit card         17%   23%   21%   7%
companies
----------------------------------------------------------------------------
Closing a bank account will help improve your score    7%    10%   9%    1%
----------------------------------------------------------------------------
A poor credit score will stay with you forever         7%    13%   5%    3%
----------------------------------------------------------------------------
If you have low income you automatically have bad      5%    12%   3%    1%
credit
----------------------------------------------------------------------------
Retail or store credit cards don't count on your       4%    10%   3%    1%
credit score
----------------------------------------------------------------------------
Credit scores only matter if you want to get a loan    10%   15%   8%    7%
----------------------------------------------------------------------------
Paying cash for everything can help your credit score  8%    11%   9%    4%
----------------------------------------------------------------------------

"In the wake of the Great Recession, consumers have been using credit cards more cautiously, despite this method of payment remaining as flexible and convenient as before. Consumers are now much more aware that credit card loans tend to be more expensive than other forms of borrowing and escalating loan balances can quickly sneak up on you. In turn, consumers are paying off their card balances more determinedly and drawing down less of their credit limits, one of the paths to improved personal credit ratings," said Michael Gregory, Head of U.S. Economics, BMO Capital Markets. "According to the New York Federal Reserve, total credit card debt peaked above $865 billion at the end of 2008 and, by early last year, it had fallen to around $660 billion -- a near 25 percent reduction in just over three years. Since then, credit card debt has been essentially flat, even as cards in circulation and credit limits have moved higher -- a sign that the caution continues."

BMO Harris also offers number of basic tips to manage and improve a credit score, including:

Check your credit report. This should be done at least 60 days or 90 days before applying for a loan in order to make sure that the report is correct. If it's incorrect, make sure to notify a credit agency before you apply for a loan. Checking your score will not change the number.

Pay your bills on time. When a bill is paid late, or is even 30 days past due, it can show up on your credit report for up to seven years.

Use credit when needed. If you never use credit of any kind, it doesn't mean that you'll have a great credit history. Lenders generally prefer to see some type of satisfactory payment history.

Use your cards lightly. Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your score by paying the balance off or keeping it low.

Consider that credit needs to be built up. A credit score is something that can take time to improve, so don't expect immediate changes and plan ahead. Your credit behavior can take months to be reflected in your score.

Survey results cited in this report are from interviews with an online sample of 1,004 Americans conducted between July 2nd and July 4th, 2014. The margin of error for a probability sample of this size is +/- 3.1%, 19 times out of 20.

About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris® and BMO Harris Bank® are trade names used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $586 billion in assets (as of July 31, 2014).

Disclosures

The survey referenced herein was conducted by Pollara Strategic Insights ("Pollara"), an independent research firm, at the request of BMO Harris Bank. Pollara is not affiliated with BMO Harris Bank, either by common ownership, management, control or otherwise. Results cited above are from an online survey conducted between July 2, 2014, and July 4, 2014, by Pollara. Interviews were conducted with 1500 individuals, selected at random from an online research panel. A probability sample of this size would be accurate to +/- 4.9%, 19 times out of 20. Data has been weighted by state, based on Census information, to ensure regional proportions match those of the actual US population.

BMO Harris Bank makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained herein and accepts no liability whatsoever for any loss (whether direct, consequential or otherwise) arising from any use of or reliance on the information listed herein. Information may be available to BMO Harris Bank and its affiliates that is not reflected herein. This report is for informational purposes only, is not investment advice and is not to be used as a basis for any investment decision. BMO Harris Bank does not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2665093
Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2665095

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., and Logan Best, Infrastructure & Network Engineer at Webair, focused on real world deployments of DDoS mitigation strategies in every layer of the network. He gave an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He also outlined what we have found in our experience managing and running thousands of Linux and Unix ...
"LinearHub provides smart video conferencing, which is the Roundee service, and we archive all the video conferences and we also provide the transcript," stated Sunghyuk Kim, CEO of LinearHub, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Discover top technologies and tools all under one roof at April 24–28, 2017, at the Westin San Diego in San Diego, CA. Explore the Mobile Dev + Test and IoT Dev + Test Expo and enjoy all of these unique opportunities: The latest solutions, technologies, and tools in mobile or IoT software development and testing. Meet one-on-one with representatives from some of today's most innovative organizations
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed ...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...