If you’re a non-prime lender, you have specific sets of criteria you look at when evaluating applicants. You may even be able to identify different credit trends and behavior based on consumer demographics that you can use for lead generation and marketing purposes.

Aside from distinguishing trends and behaviors, there is value in identifying the generational credit differences of these consumers. Each generation has different financial challenges and it’s well documented from a traditional credit point of view, so we looked at our data and found the following generational differences of alternative financial services (AFS) borrowers.

Two Generations Account for More Than 60% of the AFS Space

Each generation has specific differences. For example, Generation X carries the most debt of any generation and Millennials were raised during one of the worst economic downturns in American history, which has made them the least likely to take out a mortgage. Despite the differences between the two, Generation X and Millennials account for 73% of the online AFS space, and 63% of the storefront AFS space. The largest borrower generation in the AFS space is Generation X in the online space, making up 38% of all borrowers, and Millennials in the storefront space, making up 32% of all borrowers. This differs in comparison to traditional credit where the Silent and Baby Boomer generations account for more than half of all borrowers. In the AFS market, they only account for 24% in the online space and 34% in the storefront space.

Increased First-Time Applications for Generation Z

The utilization of AFS for adults of Generation Z, currently ages 18-22, is growing. While AFS borrowers in Generation Z accounted for only 4% and 6% of all online and storefront borrowers in 2018, there has been an increase in this group applying for AFS products. Out of all of the Generation Z borrowers in our database, 74.7% were seen for the first time in 2018, 13.9% were seen in 2017, and 11.4% were seen prior to 2017. The increase correlates with what was found in the traditional credit space. According to a recent article from Experian, Generation Z increased their average debt amount by 26% since 2017. The same article also states credit debt by generation is shifting with younger generations taking on more debt.

Notable AFS Application Data by Generation in 2018

While the largest increase of first observed applications in 2018 came from Generation Z, there was also a striking increase in first observed applications across all generations in 2018 with the overall average at nearly 50%, compared to 12% in 2017. It appears all generations utilized AFS more in 2018 than previous years. For example, in our database, Generation X borrowers who had an observed application prior to 2017 was 44.9%. Those who had an observed application in 2017 was 11.5%, and the number who had a first observed application in 2018 was 43.6%.

Another remarkable finding is, after Generation Z, the Silent generation was found to have the largest first observed AFS application in 2018, with 58.5% seen for the first time. Data from Experian suggests that the Silent generation has decreased their average traditional debt balances by 3% and is known as the generation with a stable credit and financial position, which makes their increase in percentage of AFS applications in 2018 interesting.

Average Traditional Credit Scores Remain Subprime Across All Generations

We looked at the average VantageScore 3.0 for each generation that used AFS in 2018 and found that each of the generations had a credit score considered subprime. The Silent and Baby Boomer generations have a score closer to near prime than the other generations with average scores of 596 and 573, respectively. The overall average credit score across all generations is 558.

Demographic Differences Across Each Generation

Demographic credit trends emerged in our research by generation for AFS borrowers. On average, over half of the borrowers were married (59.8%). For each generation, the average percentage increased starting with Generation Z at 50% and ending with the Silent generation at 80%. We also found that overall, roughly 52% of borrowers were female. The data follows the same pattern as marital status, with the lowest percentage being attributed to Generation Z, with about 48% being female, and the highest percentage being attributed to the Silent generation, with 55% being female. Median net annual income differed and didn’t follow this pattern. The overall median net annual income across all generations is $32,502. Generation X had the highest reported median net annual income with $36,000. Generation Z had the lowest reported median net annual income with $24,000. This could possibly correlate with Experian’s findings on credit debit by generation. Younger generations may be taking on more debt due to a lower income.


Generational credit data for AFS borrowers is valuable and may help provide a better snapshot of your customers, which may help in your customer acquisition and retention strategies.