PROVIDING CREDIT EDUCATION AND INFORMATION IS A “MUST”

In an age where financial literacy is becoming increasingly important, lenders have an opportunity to be positive and pro-consumer by providing credit education and information to consumers according to recent research conducted by SYNERGISTICS Research Corporation entitled, Revitalization of the Consumer Credit Market. Three in ten consumers report that they have at some point received educational material or other information from a financial institution about credit topics such as building a good credit history or managing debt.  Younger consumers, those ages 18 to 49, are more likely to report receiving this type of information. Almost all, eight in ten, have found this type of information to be valuable.  Furthermore, a solid majority – two-thirds – are likely to consider the institution that provided the information first when they need credit services in the future.  Among those who have not received this type of information, most – almost two-thirds – would see it as valuable.  Positive reaction is widest among 18- to 34-year-olds.

In addition, banks and financial institutions top the list when consumers are asked where they would go for education on credit or debt management.  Four in ten identify banks or financial institutions. This is wider among both the youngest and oldest respondents.  One-third indicate online sources, and three in ten cite an independent financial advisor.  Government resources are least likely to be indicated as a source of credit and debt information.

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William H. McCracken, CEO of SYNERGISTICS, stated, “Calls for greater and more in-depth consumer education on credit and debt management emerged as a result of the mortgage and financial crisis and are ongoing, particularly in the case of student and education loans. Financial institutions are in an excellent position with respect to providing information on credit and debt management. Opportunities exist to reach out to consumers with this type of information.  In addition, consumers indicate that they would go to banks or financial institutions if they needed education on credit or debt management. Younger consumers who are most likely to value this type of information are a prime target market as their need for credit services increases with their changing life cycles. Providing credit and debt management education and information will enhance favorable consumer attitudes and ideally gain additional credit relationships.  It is good business for lenders and a win-win situation for all involved.”

These are among the findings from SYNERGISTICS study, Revitalization of the Consumer Credit Market, featuring 1,008 national Internet interviews with consumers age 18 or older.  This study examines consumers’ current and potential usage of credit products, including credit cards, mortgages, equity credit, auto loans, installment loans, personal loans and lines of credit, as well as consumers’ decision-making process and future demand.  In addition, consumer response to education and debt management tools is measured.