Only 1 in 5 millennials know what a credit score is, says CreditSmart
Millennials know a lot about taking the perfect selfie or the best places to brunch, but according to new research from consumer education website, CreditSmart.org.au, it’s credit knowledge they’re lacking.
The study found that only 1 in 5 millennials were confident about their understanding of what a credit score is.
A further 75% were unaware that they were able to access their credit report for free, which according to Credit Reporting Expert, Geri Cremin, could keep them from owning their first caror home.
“Millennials are at a point where they may be looking to make their first milestone purchase, like their first car or first home. It is really important for them to get on top of their credit health so when the time is right, they’re in a good position to make the big-ticket purchases,” she said.
Plus, with the rollout of comprehensive credit reporting, having a top credit score may also be cheaper rates on personal loans.
Millennials take back the power
But despite the lack of awareness among the younger generation, 24% reported to have checked their credit score themselves or have had it checked for credit applications in the past 12 months.
A third of millennials are also seeking professional advice about managing debt and credit.
“It’s encouraging to see that although millennials have low awareness of credit, they are keen to learn and improve their own credit health,” said Ms Cremin.
And if you’re an Aussie who needs some help whipping their credit health back into shape, Ms Cremin says the key is to go back to the basics.
“Make sure you only take out credit that you can afford as not paying will have a lasting effect on your credit health,” she said.
“Making repayments on time is the best way to build your credit health. Even if it’s a small loan or small credit card, as long as you make repayments on time, you’ll start building a strong repayment history, which shows potential lenders that you can manage credit responsibly.”
Then once you’ve got your credit history sorted, head on over to personal loan comparison tool to compare a range of personal loans.