Auto financing appears to be one of the best paths to credit success for young consumers.

That assertion and more surfaced through a research project by Open Lending and TransUnion, which released a new study on Monday about the borrowing habits and credit outlook for millennials and Gen Zers.

Using data from more than 4 million U.S. consumers, the report illustrated new-to-credit consumers’ upward credit trajectory with insights into financing patterns and preferences.

Open Lending and TransUnion said the report underscores the potential value millennials and Gen Zers can bring finance companies, with key findings showing:

—Millennials and Gen Zers are poised and quick to advance: Data revealed that 30% of millennial and Gen Z thin-file consumers moved up credit tiers within two years compared to 22% of Gen X or older thin-file consumers.

—Younger consumers are loyal consumers: Two out of every five millennial and Gen Z thin-file consumers who received automotive financing at a bank or credit union returned to the same type of financial institution for their next product and often with a higher credit score (VantageScore 4.0) than returning thin-file consumers from older cohorts.

—Automotive financing is a priority: Demand for automotive financing is unlikely to dissipate, as 74% of consumers who open an automotive trade line as their second product are replacing an existing vehicle or adding an additional vehicle.

“Many financial institutions are hesitant to extend loans to borrowers with thinner credit files and lower credit scores, who are often millennials and Gen Zers,” Open Lending senior vice president of marketing Kevin Filan said in a news release. “However, this strategic consumer segment shows immense potential for upward credit mobility compared to their older counterparts.

“The financial institutions that intelligently address these ‘emerging prime’ borrowers through comprehensive data analysis and decisioning can generate higher-yielding loan opportunities and long-term customer loyalty,” continued Filan, who is among the experts scheduled to appear during Cherokee Media Group’s Auto Intel Summit + National Remarketing Conference that runs April 23-25 in Cary, N.C.

Satyan Merchant is senior vice president and automotive and mortgage business leader at TransUnion.

“We are excited to collaborate with Open Lending to provide a broader and more accurate picture of younger borrowers’ financial health and credit potential despite only just starting their credit journey,” Merchant said in the news release. “The more consumers who can participate in credit, the greater the opportunities for broad economic inclusion.

“The data from the study shows how thin-file consumers are capable of growing into healthy, prime borrowers once provided access to the essential milestone of an affordable automotive loan,” Merchant went on to say. “We believe that the financial institutions that set these deserving borrowers on the path to financial wellness will be rewarded with long-term loyalty through subsequent credit products.”

You can download the full report by going to this website.