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College Grads Without Credit
It has been estimated that about 589,000 (31%) recent college graduates do not have a credit score. It was also estimated that 1,710,000 recent college graduates do not have access to their parent’s credit line in the United States. A report published by CNBC revealed that 20% of young adults aged between 18 and 22 do not have a credit score.
To determine the total number of recent college graduates who do not have a credit score or have access to a parent’s credit line, we began our search by looking into government databases such as the National Center for Education Statistics (NCES), United States Bureau of Labor Statistics, and The Hill. Through these channels, we were able to find the number of college students who graduated in the years 2017, 2018, and 2019. We then extended our search to include industry-specific websites such as Lexington Law and media websites that published reports on credit scores such as CNBC. An extensive search through these channels provided us with the number of college students with credit loans and those without credit scores. While the direct figure for the number of college graduates who do not have a credit score in the United States was unavailable, we utilized the data obtained to calculate an estimated figure.
We then expanded our search further to include market-specific websites such as Edvisors, Consumer Financial Protection Bureau (CFPB), and College Parent Central to find the number of graduates without parent’s credit line. During our search, we were able to find the number of college students with credit cards along with information pertaining to the Credit Card Act of 2009. We utilized the available data to estimate the number of college students do not have a credit score and do not have access to a parent’s credit line in the United States. Our findings and calculations have been presented below.
College Graduates without a Credit Score
According to the report published by the CFPB, there are over 50 million individuals in the United States without a credit score and over 26 million without a credit history. Currently, nearly 20% of young American adults, aged between 18 and 22 do not have a credit score. Studies have also shown that 19% of the country’s overall population or more specifically, 45% of the American adult population is found to be “credit invisible”. It has been found that 31% of recent college graduates have no student loan or federal debt. This implies that 31% of graduates do not have a credit score.
A report published by the Bureau of Labor and Statistics revealed that there are 1.2 million college students, aged between 20 and 29, graduated during the period 2016 to 2017. It was found that 37% of individuals aged between 25 and 34 own a bachelors degree while 30% of Americans who are aged 55 and above have a 4-year degree. Of those who are college graduates, 55.9% are found to be Asian Americans, 37% are found to be non-Hispanic, 23% are African American, and 16.4% are Hispanic Americans. For the current year, over 1 million college students will graduate with an associate’s degree, 1.9 million American students will obtain their bachelor’s degree, about 780,000 young adults will have a master’s degree, and 182,000 will obtain their Ph.Ds.
Number of recent college graduates who do not have a credit score = Percentage of college graduates who do not have a credit score x Total number of recent college graduates in the United States (2019)
College Graduates without access to a parent’s credit line
According to an article published by College Parent Central, there are approximately 58% of American graduates who use credit cards and about 30% of college graduates are found to have credit card debt. Based on the Credit Card Act of 2009, college students below the age of 21 are not allowed to own credit cards except when a parent or an adult co-signer attests to their ability to have a credit line. It was found that 10% of co-signer applicants have been approved, implying that only 10% of American college graduates have access to a parent’s credit line.
Number of recent college graduates in the United States who have access to a parent’s credit line = Percentage of college graduates with access to a parent’s credit line x Total number of recent college graduates in the United States (2019)
Number of recent college graduates in the United States who have access to a parent’s credit line = 10% of 1.9 million = 190,000
Total number of recent college graduates in the United States who do not have access to a parent’s credit line = Total number of college graduates — Number of graduates who have access
Total number of recent college graduates in the United States who do not have access to a parent’s credit line = 1.9 million — 190,000 = 1,710,000
Therefore, there are about 1,710,000 college graduates who do not have access to a parent’s credit line.