Millennials (those aged 18-29) have faced a rough job market and economy as adults, and therefore often have encountered a lot of difficulty building their credit scores. In fact, according to Experian, millennials have an average credit score of 628, the lowest for any age group and 50 points below the national average.  Unfortunately, many of these older millennials are coming to the age point where they want to purchase real estate and/or acquire financing, and have difficulty because of their credit.  As a real estate/financing professional, you can tap into this market, while bringing value and gaining customer loyalty, by sharing these tips and helping millennials with their credit.

Here are some easy ways for millennials to build credit:

● Acquire a credit card

Many millennials are wary of credit cards after seeing others’ debt struggles and unemployment. According to some surveys, over 60% of millennials don’t have a primary credit card.  Opening a primary credit card can be the easiest and quickest way to build credit, and can benefit a huge portion of millennials. Although a first credit card may have a very small balance, even small payments can build a credit history. You can tell millennials to put one low monthly expense on their card.

● Utilize secured credit cards

Even though credit cards are an easy way to build credit, some millennials won’t be able to get approval to open one. Another great option is a secured card, where a cash collateral deposit becomes a credit line for that card. These deposit amounts could be as small as $250-$300. Secured cards are still a great way to build credit if the payments are made on time.

●Keep balances low

When opening credit, millennials have to make sure they charge an amount they can afford every month. High balances can cause higher fees and big credit damage if they aren’t paid off in time. On the other hand, balances can also be used to boost credit scores. The utilization ratio (or balance-to-limit ratio) plays a large part in credit scores. Keeping balances under 10% of credit card limits will result in the highest score possible in this category. This percentage should be used a few months prior to applying for new credit cards or loans to ensure scores are at their best when the lender/creditor is viewing credit applications.

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