oscarnominations2017.com Reveals Important Credit Facts for Young Adults
CNN Money recently reported that according to new FICO collected research, more young adults are veering away from using credit cards than ever before. The study suggested that the younger generation is fearful of damaging their credit scores, especially after witnessing the negative effects that the recession has had on the previous generations.
Although it’s a good idea to be cautious about using credit cards and maintaining good credit, young adults shouldn’t fear credit. Because the financial editors at oscarnominations2017.com are dedicated to providing education about all things credit, they’ve revealed some top facts that every consumer should know about credit.
Credit Score Crashers
Young adults should understand that credit cards are not the only thing that can cause bad credit. Even if consumers don’t own credit cards, they can still rack up poor credit in other ways, such as defaulting on a loan and filing for bankruptcy. Foreclosures and unpaid judgments can also lower credit scores as well.
Also realize that failing to build credit may result in no credit score, which in some cases can be just as undesirable as poor credit.
Credit Score Crasher Myths
Contrary to popular belief, when consumers check their credit reports it will not lower their credit scores because it is a soft inquiry. Soft inquiries won’t decrease one’s credit report, however, a hard inquiry will. When a credit card company or lender runs a credit check on a consumer’s report it will cause the consumer’s credit score to slightly drop.
Paying a utility bill or rent late shouldn’t lower one’s credit score either unless the consumer’s account becomes past due or the landlord evicts the consumer. When a business sends a consumer’s account to the collection agency, then this could result in damaged credit scores. Unlike with a late credit card payment, late bills generally won’t otherwise affect one’s credit score.
The Need for Good Credit
Consumers’ credit scores can affect their opportunity of receiving a loan with low interest rates and fees. While young adults may not be interested in loans right, they may be down the road, in which case they’ll want their credit scores to be in shipshape condition.
When consumers have poor or no credit, their only loan options sometimes are unsecured personal loans, which can have much higher interest rates than traditional loans for people with good credit standing. Although bad credit loans can help in emergency situations, young adults should focus on building good credit so that they can receive lower interest rates on loans in the future.
A good credit score can also help young adults land their dream jobs, receive the keys to rental property, and even gain access to favorable interest rates on cell phones and insurance premiums.
oscarnominations2017.com is a leading authority site on credit related consumer services, personal finance, bad credit loans for people with poor and bad credit, credit sources, credit cards, and all things credit.