Six in every ten credit card defaults are by men
Women are more likely than men to pay their credit cards, personal loans, mortgage and overdraft on time, a Veda Advantage study has revealed.
The study into gender reviewed all credit activity recorded by Veda over a five-year period and revealed that six in every ten credit card defaults were made by men.
Other key findings included:
- Men accounted for 62% of personal loans defaults, 62% of defaults on overdrafts, and 56% of mortgage defaults.
- Men and women were equally poor performers in defaulting on phone bills, with women accounting for 49% of defaults and men 51%.
- Men accounted for nearly 55% (54.7%) of total defaults over all accounts.
- Women made less credit enquiries than men. Men accounted for 71% of individual commercial enquiries, 56% of credit cards enquiries, 56% of overdraft enquiries, and 56% of personal loans enquiries.
- Men and women were almost equal when it came to phone enquiries, with 51% of enquiries coming from men, and 49% from women.
- Young people (between the ages of 18 and 30 years) accounted for the great percentage of overall credit applications in the study with 35.8% of all inquiries coming from those in this age bracket. Men made 19.1% of the inquiries and 16.7% of the inquiries were made by women.
- Young people also accounted for the high default levels, with 44.8% of all defaults registered against those in the 18 – 30 years age bracket. Young men (18 – 30) accounted for 23.5% of total defaults, and young women accounted for 21.3%.
According to Veda Advantage, this study indicates women appear to be more reliable payers than men, although it is important to note that across this five year period women applied for less credit. All defaulters, regardless of their gender, should make a conscious effort to make timely payments and avoid defaults being registered on their credit file – which can leave a painful financial legacy.
Unfortunately, bankruptcy statistics are climbing in Australia. Everyone needs to try to manage their credit obligations in a consistent and responsible way, to ensure their credit file and therefore their financial future is not marred by defaults.
In the Bankruptcy area, another study released recently by Veda Advantage showed that in more than 16 000 Australian bankrupt cases the ratio was male 54.3% and female 45.7%.
Veda Advantage tips to maintaining a healthy credit file:
Think - carefully consider your credit commitments. If you think you may have trouble paying a phone bill, for example, investigate pre-paid options, and create a budget to make sure you can set money aside to repay your loan.
Talk - if you find you can not make a repayment contact the organization and work out an extension plan or other options available.
Save - set money aside in case you fall into tough times to avoid defaults.
Notify - make sure your details are accurate and up to date: If you have moved and have not notified one of your credit providers about your change of address they may be sending notices to the wrong address, and it is your responsibility to notify the financial institution each time you move.
Check - you credit file at. This will give you up-to-date information on your credit history, and also help you maintain the security of your details.
Consider - a credit alert system, which alerts you to changes being made on your credit file to avoid fraud.
Investigate - Shopping around for credit can reflect badly on your credit history, so investigate credit options thoroughly before you apply.
The Gender study reviewed the default patterns of all credit active individuals on the Veda Advantage database between 1 June 2002 and 31 May 2007.
Veda Advantage holds the personal credit history files of approximately 14 million credit-active Australians. Veda Advantage also assessed the credit behavior of 100,000 randomly selected males and 100,000 randomly selected females across a similar timeframe. Similarly, this study also revealed a high default level amongst males.
The Veda Advantage Bankruptcy Study carried out an analysis of 16 518 bankrupt, and 16518 non-bankrupt samples. The study only referred to case studies over the age of 18. The Veda Advantage study also revealed that 54.3% of bankrupt people were male and the most common age for bankruptcy is between 28 to 37 years.
3-Aug-2007