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Young Borrowers' Usage of Cosigned Credit Cards and Long Run Outcomes, Accessible data
Figure 1. Distribution of Parents’ Credit Scores by Credit Card Type
Figure 1 shows the distribution of parents’ credit scores by credit card type. The distribution of parental credit scores for borrowers with an individual credit card or no credit card look similar, while the distribution for the cosigned credit card is skewed to the left. This indicates that borrowers with a cosigned credit card have parents with higher credit scores than borrowers with other types of credit.
Figure 2. Average Credit Score by Age and Credit Card Type
Figure 2 shows the average credit score by credit card type as young borrowers age. The average credit score for borrowers with an individual credit card starts at 644 when a borrower is 20 and increases to 686 by the time a borrower is 30. The average credit score for borrowers with no credit card starts at 642 when a borrower is 20 and increases to 660 by the time a borrower is 30. The average credit score for borrowers with a joint credit card starts at 688 when a borrower is 20 and increases to 716 by the time a borrower is 30. This shows that the credit score gap between borrowers with a joint credit card and borrowers with an individual credit card or no credit card persists as borrowers age.
Figure 3. Average Credit Score by Age and Credit Card Type, Conditional on Parent having a Credit card and Prime Credit Score
Similar to Figure 2, Figure 3 shows the average credit score by credit card type as young borrowers age, but the sample is restricted to borrowers whose parents have at least one credit card and a prime credit score. The average credit score for borrowers with an individual credit card starts at 682 when a borrower is 20 and increases to 727 by the time a borrower is 30. The average credit score for borrowers with no credit card starts at 669 when a borrower is 20 and increases to 717 by the time a borrower is 30. The average credit score for borrowers with a joint credit card starts at 705 when a borrower is 20 and increases to 737 by the time a borrower is 30. This figure shows that there is still a persistent gap over time between the credit scores of young borrowers with cosigned credit cards and individual credit cards or no credit cards but that the gap is smaller than in the full sample of young borrowers.
Figure 4. Percent with Mortgage by Age and Credit Card Type
Figure 4 shows the percent of young borrowers with a mortgage by credit card type. At age 20 the average percent with a mortgage is below 1 percent for all groups. By age 30, the percentage with a mortgage increases to 23.6, 28.2, and 26.4 for borrowers with no credit card, an individual credit card, and a joint credit card respectively. This suggests that borrowers who enter the credit universe with a cosigned credit card are more likely to be homeowners by the time they are 30.