Top 5 Credit “No-Nos” for Generation Y
With the rise of Generation Y or commonly known as Millennials, some financial experts are getting worried at how this age group starting to go astray in dealing with their finances. It seemed that they also take the title for being the least credit savvy compared to previous generations. This, however, can be corrected with the help of their parents or guardians in establishing great habits and nurturing a right attitude that will surely impact their credit future. Also with the existence of financial education resources available online, may it be free or paid, this will further empower them in dealing and making the right financial decision, specifically the use of credit.
So what are some things that the Generation Y or Millennials should avoid to attain that bright financial picture? Below are Top 5 tips that they should keep in mind.
DON’T carry a big balance. With too much positivity in the minds of the Millennials, some are applying for an amount bigger than what they can afford. But even if you do and can be able to pay off, carrying a big balance may pull down your credit score when you use more than 30-50% of your available credit.
DON’T be car poor. Flash is fun but usually expensive and that might not be good for your credit score especially that you are still starting up. Keeping it basic will help you lay a stronger overall financial foundation and impressive credit score.
DON’T let YOLO impede with your budget. Be strict and serious in complying with your budget and limit yourself in spending with what you can only afford. Save up for what you want and practice delayed gratification.
DON’T cancel your old credit cards. Instead of closing unused, inactive or existing credit cards, it is best to keep it and use them for small purchases that you can pay off on time. Choosing the former might affect negatively in your credit history and we surely don’t want that to happen.
DON’T ignore your credit report. Keeping track with your credit report will help you make sure that you are in good standing. In this way, you won’t have a hard time in applying for loans in the near future as your credit score will determine your creditworthiness.
Being young is cool, but having a good credit score will lead you in a much brighter future.