As the next generation enters their mid 20s it is important for them to be strategic about their credit.
New data from TransUnion indicates that Generation Z, or those who are currently in their early 20s, are taking on more consumer credit. Specifically, 44 percent of this generation currently has some sort of credit balance, an increase of about 11 million people from the same time in 2018. Additionally, the number of Gen Zers with a mortgage increased a whopping 112 percent year over year, according to TransUnion.
As this generation begins to take on debt in the form of credit, they should understand how to manage it responsibly so they can have a strong credit score in the coming years to help them finance large purchases, if needed.
We offer these tips to help manage credit.
- If you can, make payments above the minimum balance so you have a chance at paying down the debt faster.
- If you can, make an extra payment in a month, which will further increase the speed in which you pay your debt down.
- Avoid late payments – late payments can have a negative impact on your credit score.
- Track your credit score. There are ways for you to check your score free online on an annual basis. Take advantage of that.
- If you see inaccuracies on your credit report, try to get those removed so you can maintain a healthy credit score.
- Be wise with your spending. While a line of credit may seem like a quick, free source of cash flow, the balances you accrue come with an interest rate that you will be paying back to that credit card company as long as the balance remains.
If you have any questions about credit scores and how it can impact your ability to obtain certain home loans in the Roseville area, make sure to contact us. We will be happy to walk you through your options.