You’re young, don’t really need a good credit score… right? Wrong. Understanding and developing credit is considerably more important to a millennial than any other generation. Most millennials fall into one of two categories: no credit history or bad credit history, and they can be equally as detrimental. Although poor credit may not affect you now, it could make life difficult in the near future.
Here are some reasons why starting to build your credit now is more important than ever:
Building Credit Takes Time
Imagine trying to buffer a video using the slowest possible internet connection… that’s what it feels like to build your credit. A crucial part of your credit profile is the length of your accounts and is judged by the average age of all of your accounts. It is imperative for you to start building your credit immediately because it takes years to develop and adding new cards could bring your score down.
Fixing Credit Takes Even More Time
Mistakes happen and they can affect your credit score overnight. Although your score can drop rapidly, it will take a long time to restore. This means it’s important to get started immediately so that if you make mistakes you have time to recover.
Better Credit Saves You Money: Having a good credit score can save you significant amounts of money in the long term. The higher your credit score means that you will qualify for better rates on credit cards, loans, and even car insurance (depending on which state you live in). This can save you thousands of dollars in interest.
Better Credit Means Better Opportunities:
You can also utilize a high credit score to qualify for more opportunities. You may need a new car, job or even place to live and your credit score has an impact on that. Building your score can ensure that when the need to use it arises (for instance, when you are trying to buy a house), you won’t be denied for having subpar credit.
Financial Safety Net
It would be nice to imagine that we could live our lives without anything bad happening, but as we all know, that’s just not possible. Tragedy strikes and you need to be prepared. Having a developed credit profile will help you qualify for credit cards that can support you through financially tough times.
If you have any questions about how your credit may affect the home buying process, Click Here to request a call from one our Loan Officers.