Millennials and Credit
For many people in their 20s, getting their career off the ground is a huge priority. After this goal, most Millennials site saving for retirement and paying off their debt as major goals. Surprisingly, however, improving their credit is rarely seen as much of a priority. Making sure that your credit score is high, however, is crucial to making sure that you can get the best rates on loans, qualify for good jobs, and so much more. In fact, how you treat your credit in your 20’s has the potential to affect the rest of your life.
The Importance of Your Credit Score
Just about everyone knows that people with high credit scores get better rates on loans. In your early 20s, however, improving your credit score can seem like a pretty low priority, particularly if you’re not planning to take out a large loan like a mortgage in the near future. It’s important to realize, however, that mistakes such as missing payments or allowing a loan to go into default can last for years. Larger mistakes such as a repossession or bankruptcy can last as long as seven years. That means that by the time you’re ready to buy a home, your past mistakes could still count against you.
It’s important to note that your credit score is also used to determine a lot more than your eligibility for a loan. Many auto insurance companies use credit score as a way of determining who will be a more responsible driver. It’s standard practice for jobs in the banking and finance industries to require a credit check. A low credit score can effectively end the career of someone hoping to work in one of these industries.
In the short term, a low credit score means that it’s much harder to qualify for loans that will allow you to buy a car or refinance your credit cards or student loans. If you do qualify with bad credit, the higher interest rates that you’ll pay will cost you hundreds or even thousands of dollars a year. That’s money that could be used to pay off the principal of those loans or be used to build up your savings.
Get Help Repairing Your Credit
Going into default on a loan in your twenties might not seem to have long-reaching consequences, but even simple credit mistakes can affect your credit score for years. Fortunately, there are ways to fix your score if you want to correct the mistakes of your youth. Credit restoration and repair services can help you to remove negative information and reduce the effects of your past mistakes.