Young adults can be at a credit disadvantage
Feb 23, 2013 Walt Wojciechowski
When just starting out on their own, though they have not had the opportunity to miss bill payments or charge more than they could afford, many young adults will find that they still cannot qualify for a line of credit that comes with a decent interest rate and credit limit. This is because many lenders are hesitant about taking on the risk of loaning funds to individuals who have never been given the responsibility.
If these young consumers are unable to honor a credit agreement or let other accounts go into default at a young age, the results can be detrimental and affect qualifications for loans as well. When this is the case, Steve Bucci at Bankrate suggested that these individuals take responsibility for their actions - understanding how younger people came to attain a bad credit score is important to ensure changes are made in the future.
Bucci recommended creating personal budgets and spending plans, as well as setting financial goals that should be attained within the next five to 10 years. Having a strategy to follow can help young spenders stay on the right track.
In the meantime, until a good score is attained, those new to the world of credit might want to consider asking a local credit bureau about creating a Payment Reporting Builds Credit score so they can still have access to funds if necessary. This rate can show lenders that the individual has a positive record of paying multiple utilities accounts on time, helping to prove that they are not a large risk.