Most millennials are suffering from bad credit scores. They experience a problem buying cars and renting flats, as well. In fact, 14% of respondents reported that they had to share their accommodation with others because their credit didn’t allow them to rent on their own.
Taking out payday loans online with no credit check has also become a real problem. Despite all the positive aspects, it is not so available for young people. Let’s see why it is the case!
Real Problem of Millennial Americans
A number of young Americans who open credit cards keeps growing. And this causes a bunch of problems.
When Millennials decide to make a payment of $2,000 on their first car with the value of $11,000, they have to face immense interest rates and service fees. Eventually, they have to put down more money than they could afford. Some of them are even asked to find a guarantor in order to be approved for funding.
According to the federal survey, 24% of Americans said they never mastered the skills of forming a good credit score in the first place, and 15% said that their loan is uncontrollable. The situation seems to be quite confusing.
Who’s to Blame?
Millennials often make mistakes due to their young age. The credit damage that millennials experience is caused by unreasonable mishaps.
Around 36% of the millennials who delayed credit card payments said they simply didn’t care about it. Additional 10% said they had a bad credit loan they didn’t know they had to cover. This means that almost half of those who delayed credit card payments could have escaped from them by sticking to their financial obligations.
A considerable percentage of millennials felt they were not ready to take the financial challenges that destroyed their credit reputation. Many of them simply don’t have sufficient competence to manage their finances properly. As a result, they fail to make adequate decisions and use special mechanisms that build a strong credit history. It’s not a surprise that 15% of millennials said they constantly delay or skip credit card payments, and 40% can’t cover them at all.
Making Insights into the Global Market
Understanding how today’s global business works is crucial to develop efficient financial behaviors. The knowledge of market dynamics and economic policies will determine your ability to make reasonable financial decisions.
The problem of payday loan scores is real. According to 2020 data from TransUnion, a problem is faced by the following demographic categories:
- More than 40% of millennials;
- Around 20% of boomers;
- Just 9% of the Silent Generation.
Due to a young age, millennials have a shorter credit background. This will impact their credit ratings. Older generations have had more time to form a strong credit past that would help them offset previous mistakes.
Bad credit is hard to fix. Negative marks tend to stay on credit reports for several decades. Even though private lenders usually give more power to recent credit history, a missed payment from the past can still have a negative impact on the current financial reputation.
Many millennials are unable to form credit in college and university. According to the Card Act of 2009, students under 21 must show independent means of income or have a guarantor to apply for a payday loan online and get approval for a credit card. This needs to be done not to let credit companies benefit from students by signing them up for bank cards with high interest rates and high service charges. Thus, young people can get away from getting credit cards at all.
