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Experian, the credit rating company, published averages recently. They report that the average debt per household is $78,030. They also reported that the average Vantage Score, that number between 400 and 850 that shows how creditworthy someone is, is 751. But those tell almost none of the story. What we will look at here are if those averages mean anything as far as screening. Averages vary by a couple of demographics, and a more than two measurements.

The generation with the highest debt load is Generation X, those born between 1961 and 1981, which has a debt load of $111,121. They beat out their parents’ generation, Baby Boomers, by about $10,000 in debt. But their parents, those Baby Boomers, have a much higher Vantage Score than do the Gen Xers, 792 vs. 718.

The generation with the most credit problems is Generation Y, also called Millennials, of whom there are about 80 million. They were born between about 1980 and the early 2000s. They have the lowest debt load of $34,765, but also the lowest credit score of 672.

The Millennials have a disproportionate amount of debt as compared to the rest of the population, with 420 percent over the average for student loans, 135 percent above average for auto loans, and 100 percent above average for credit card debt. Since they usually earn less than the older generations, that puts them up to their noses in debt and thus a teetering risk for being granted more credit and possibly on the edge for collections and bankruptcy.

Gobanking.com called them the “Debt Generation.” They are socked with huge student loans, car payments that are eating them alive, and rents and mortgage payments (if they have a mortgage), that use up some 60 percent of their income. That means many are on the precipice of disaster all the time.

Part of the reason is that no one has ever taught them personal finance. But that doesn’t help those who are faced with hiring them or renting to them. Gobanking.com reported that by about age 30, they are so stressed about debt that their ability to function logically is imperiled. And most of the debt they have is considered “bad debt.” That is a term new to me and doesn’t mean they haven’t paid a debt; it means Yahoo Finance reports, “48.4% of Gen Y debt comes from non-asset building loans – bad debt –according to a recent study of over 20,000 users by the financial reward site, Saveup.com.

“Results found Generation Yers had an average total debt load of $28,930, including $4,113 in credit cards, $7,358 in lines of credit and $12,410 in car loans on average.” Those figures differ slightly from Experian’s, but the picture is close. “Good debt” is considered debt that builds equity or benefit, such as mortgage

None of those figures means that an individual won’t be a good employee or renter. What it does mean is that they may not have the same attitude about careful money management as their parents and grandparents have. What it also means is that in looking at financial statements and credit reports it is essential to look at their total debt load compared to their current income, and if hiring, their anticipated income in a new job. Of course, these are averages and some Millennials have followed in the older generations’ footsteps in learning and using credit and money wisely.

The generation with the lowest debt and highest credit score: those people 66 years of age and older. Their average debt load is $38,043 and their average credit score is 829. Even so, reports Experian, the largest portion of their debt is for first and second mortgages, and their credit card debt is 43 percent higher than the national average. Even so, those folks are probably not looking for work or for an apartment to rent. But you never know.

Averages are great, and they tell us how we stand personally, but they are only one indicator of an individual’s own situation. Many people are responsible and many people are irresponsible in every demographic. That’s why we screen individuals and not an entire age group or a demographic such as religion, race, or national origin.

By Robert L. Cain

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