Credit Fumble (as defined by Credit Karma): overspending on credit cards, missing payments, having an account sent to collections or defaulting on a loan. An all too frequent event that snares 2/3 of people before they turn 30 years of age. 

It’s Super Bowl week here in the San Francisco Bay Area so time for the football analogies to flow. This one comes courtesy of Credit Karma, who is out with sobering survey results about the consequences of financial errors made prior to the age of 30 (note the low percentage of survey respondents who had received financial education prior to college and how these mistakes led to the boomerang phenomenon of moving back in with parents). Here are the main takeaways:

• More than two-thirds of people surveyed (68 percent) made at least one major Credit Fumble before turning 30: either overspending on credit cards, missing payments, having an account sent to collections or defaulting on a loan.
• Three out of four of respondents felt like the financial mistakes they made before they turned 30 had a negative impact on the quality of their life.
• Only 28 percent of people surveyed received some type of personal finance education before college, with the majority of that education (58 percent) coming from parents.
• More than two-thirds of people surveyed (69 percent) did not properly understand what credit scores were when they got their first credit card; 73 percent said that better financial education could have prevented them from making credit-related mistakes.
• These Credit Fumbles make it hard for people to improve their financial situation as an adult: 61 percent of people surveyed were turned down for a credit card after making a Credit Fumble, more than a quarter (26 percent) had to move back in with their parents to recover financially.

Pretty depressing results, right? How about having your students do the following:

• Develop a playbook (couldn’t resist keeping that football jargon going) on avoiding a credit fumble.

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Check out NGPF’s new unit on Types of Credit!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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