NYLOANS by Zoya Gervis
New York office - 646-873-7565 / usnews@swns.com
NEWS COPY - WITH VIDEO & INFOGRAPHIC
Forty-six percent of millennials feel their credit score is holding them back in life, according to a new survey.
A study looking into the credit knowledge and experiences of 2,000 Americans found that a surprisingly high number of young people are burdened by credit card debt or struggling to overturn a poor credit rating and enduring negative repercussions as a result.
These negative repercussions are broad and wide-ranging. As many as one in four (25 percent) feels their credit score has already prevented them from securing a desired house or apartment and a fifth (20 percent) are convinced they would get denied a mortgage were they to apply in their current financial state.
In addition to affecting homeownership opportunities, the study, conducted by FinTech firm OppLoans, found that 27 percent of millennials studied currently blame their poor credit score for preventing them from getting a new car.
The OppLoans study also found that over a quarter (26 percent) of millennials have applied to get approval for a new loan or line of credit and been turned down.
The impacts of negative or non-existent credit compounded by credit card debt were apparent throughout the results -- 14 percent feel their credit rating is currently forcing them to be perpetually stuck living a college lifestyle by living with roommates because they simply can’t afford to rent an apartment on their own.
Many of those studied lament a lack of education on the matter -- in fact, nearly a quarter (24 percent) of millennials feel they were insufficiently prepared on the proper and effective ways of developing a good credit score either by their parents or in school.
That might explain why a large number of millennials aren’t taking certain measures to help regain a healthy credit status -- less than half (48 percent) have set up automatic payments to tackle their credit card debt.
Seventy-two percent of millennials also had never tried to negotiate down a bill with a service provider and another 76 percent have continued using their credit cards without attempting to control their spending.
OppLoans CEO, Jared Kaplan, offered advice on where many a millennial may be making easy-to-avoid mistakes.
“There are many easy ways that young people can avoid hurting their credit. For instance, our survey found that 36 percent of millennials who missed a credit card payment simply forgot about it. Almost all credit card companies allow customers to set up automatic payment plans, and these can be programmed to cover only the minimum amount due if someone’s on a tight budget. This is an everyday hack that can help millennials avoid credit damage and late fees,” Kaplan stated.
The combination of a lack of credit knowledge and an inability to implement positive credit practices is arguably leading many millennials to feel their finances are in disarray. Forty-three percent of 18-34’s with a credit card feel like their level of debt is currently unmanageable.
In fact, one in five millennials feel like they no longer have control over their finances and just 38 percent feel like they have complete control over the money in their bank account.
The survey also uncovered regional differences in spending habits. Overall, people in the Northeast have the most trouble controlling their outflow of cash, with 23 percent saying they “always” have trouble limiting spending. By contrast, only 13 percent of Midwesterners report this level of difficulty.
Top 7 Millennial Money Hacks from OppLoans
1. Use a free budgeting app
Budgeting apps are a thing, and they’re perfect for tech-savvy millennials. They keep you organized and honest. Take advantage of them.
2. Check your credit report
You can get a free credit report once a year upon request. Visit annualcreditreport.com for yours. Knowledge is power.
3. Go cash-only
Credit cards are easy to overuse, but with cash, you can’t spend what you don’t have. Make a budget and withdraw “fun” money once a week. Once it’s gone, you’re done until next time.
4. Set up automatic payments
Use these to avoid late fees and credit damage. But be careful: if you don’t have funds to cover the bill, you’ll overdraw your account. If you’re on a tight budget, consider setting your plan to pay only the minimum amount due, and deal with the rest manually.
5. Call if you’re behind
Creditors lose money when they sell your debt to a collection agency. If you’re behind, they might be willing to negotiate with you. It doesn’t always work, but it’s worth a try.
6. Close old utility accounts
Millennials move around a lot. In the shuffle, it’s easy to forget to close an account. Don’t let a silly slip-up damage your credit.
7. Open a savings account
Millennials know it’s often too easy to withdraw money from a checking account. Set up a separate savings account and get in the habit of making regular deposits. Bonus: you’ll earn interest, and that’s a wonderful thing.
