The Economy and Gen Z

Posted by  Patti Kresner   in       7 months ago     282 Views     Comments Off on The Economy and Gen Z  

Retailers and marketers take note!

How The Recession Affected Those Born In or After 1995

Generation Z consumers—those born in or after 1995—are actively seeking and using credit despite many of them growing up during severe economic recessions, according to a new study by TransUnion.  new global TransUnion (NYSE: TRU) study

Gen Z saw their parents and other family members suffer through bouts of unemployment and challenging economic conditions, especially in the 2008-2011 timeframe, that had not been seen in generations.  Even so, this youngest credit-active generation has a strong appetite for credit.  In fact, they are taking out more credit cards and auto loans than the Millennials of the previous generations.  And that should make retailers smile.

“The oldest set of Gen Z consumers came of age during an elongated economic expansion and relaxed underwriting environment, which allowed for a comparatively easier entrance into the credit market than their Millennial counterparts,” said Matt Komos, vice president of U.S. research and consulting for TransUnion.   “In turn, they’re embracing credit opportunities to start building their financial resumes early.”

According to the study: 

  • Gen Z is the first generation of digital natives and they have come to expect a seamless consumer experience across all walks of life – including how they access, use and manage credit.
  • Gen Z young adults are aware of the importance of building and maintaining healthy credit habits such as maintaining low balances, as an effective way for them to start building their financial resume.
  • In addition to student loans they may already have, credit cards help diversify their credit portfolio and build their credit history.
  • Consistent and on-time bill payments can positively impact a thin credit profile, as many lenders now incorporate rent and utility payments in their lending decisions.

About Matt Komos, Vice President of U.S. Research and Consulting for TransUnion 

Matthew Komos leads financial services research and consulting in the U.S. and is charged with providing insights and exploring emerging trends in consumer credit. He has over 18 years of experience in lending, with a focus on risk management, growth dynamics, customer profitability, and analytically derived solutions across the full consumer lifecycle. He also has extensive experience in the business lending arena. Komos has worked within and consulted for some of the largest financial institutions in the world, as well as various startup consulting and lending firms where he’s leveraged empirically-based solutions to solve complex business problems.

Komos earned a bachelor’s degree in economics with a minor in mathematics from the University of Illinois at Champaign-Urbana, and a master’s degree in applied statistics from DePaul University. He’s a member of the Risk Management Association and teaches statistics at both the graduate and undergraduate levels.

This interview is provided by TransUnion