Credit for Millennials | Waccabuc Real Estate

Millenials are the largest portion of the US population and range between the ages of 19 and 34. From a psychographic perspective, millenials tend to look at the big picture and measure their success based on their ability to make meaningful decisions that will have a positive impact on the world.
But what about their finances?
The average debt for a millennial is $26,485 (excluding the price of a mortgage). From a distance, millenials appear to be in a slightly better financial position than Generation X (age 35 – 49), holding an average debt of $26,670. However, when we dissect the spending and credit habits of each generation, it is apparent that millenials are far more likely to open new accounts to purchase material goods that do not contribute to their financial growth (37% of new accounts opened by millenials go to car loans and retail cards). Further, millenials have a minimal education of the credit industry and often make poor credit choices.
According to an Experian survey conducted earlier this year, nearly 30% of active credit holding millenials admitted to maxing out at least one of their credit cards and 50% of millenials didn’t even know what interest rate was being charged on their credit cards/loans.
Below is a list of suggestions and notable information for millenials that are not familiar with the credit industry:
  • Find out what your credit card limits are and try to keep balances under 50%.  If applying for financing or other credit related tools keep balances under 10% of credit card limits a few months prior to loan application.  This will ensure better credit scores when credit is pulled by lenders.
  • Learn what interest rates are being charged on existing and potential credit cards.  Once credit scores are improved use better score thresholds to apply for cards that offer better terms.
  • When you open a new line of credit, be aware that your scores will drop due to a decrease in your average age of credit.  Having the right timing when you are opening a new line of credit is important.
  • Late Payments on accounts cause dramatic decreases in credit scores and can remain on credit for 7 years.  In order to display a healthy credit profile, it is crucial that you make timely payments.  If you have delinquencies on credit reach out to us for a free credit analysis and we will give you feedback on how your credit profile can be improved.
  • If there is a late payment on an account, expect a late fee charge (usually around $30).  If the creditor agrees to waive this charge it does not mean the delinquency mark on credit will be removed.
It is important to expose millenials to the affects of poor credit choices, educate them on the industry, and show them how they can use credit as a tool to leverage and secure their finances. Getting into the habit of thinking about their future and making good choices will help develop better credit.  Having excellent credit can lead to greater savings on financing down the road and more opportunity.
Tracy A. Becker, President
FICO Certified Professional
Expert Credit Witness Certified
Author “Credit Score Power”
North Shore Advisory Credit Repair
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Tracy A. Becker, President
FICO Certified Professional
Author “Credit Score Power”
Expert Credit Witness Certified
North Shore Advisory, Inc.
5 West Main Street. Suite 207
Elmsford, NY 10523
P: 914-524-8300
F: 914-524-5014
“Great Credit Brings Great Opportunity!”

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