Establishing a Credit History

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One of the steps on the road to adulthood in the U.S. is establishing a credit history. Sometimes in your life you may want to buy an expensive item such as a car or house. So you have two choices. First, you can save for the purchase. Set up a savings account and after several years purchase the item. In the case of a house this may take almost a lifetime of savings. The other approach is to obtain a loan. But before you can get a loan, you must establish a good credit history. One way to do this is obtain a credit card and make sure that you pay it off every month. That is your foot in the door.

If you go back to 1900, most young people did not own home. They lived in their parents home and saved every nickel and dime and eventually in their middle age built a home. That is because home loans generally did not exist in those days.

Approximately 58 percent of millennials have been rejected for at least one financial product, a new survey has found.

The reason, according to the Bankrate.com report published Wednesday, is because of their credit score.

Meanwhile, the survey found that 53 percent of Generation X -- people aged between 39 and 54 -- and 27 percent of baby boomers -- aged between 55 and 73 -- have been denied a financial product.

“An unintended consequence of the CARD Act, which went into effect in 2010, is that it has become much harder for people in their early and mid-twenties to obtain credit,” Bankrate credit card industry analyst Ted Rossman said in the report.

Source: Here’s why a majority of millennials are rejected for loans, credit cards

“Establishing credit is a lot like getting started in your career. Everyone wants you to have experience, but it’s hard to get that first experience,” Rossman added.

That's one area I never had difficulty in, mostly because I was very naïve and ignorant. I literally thought you HAD to pay off your credit card balance in full every month or your things would get repossessed or other legal action would be taken such as wage garnishment. I relied on card that because my over-controlling mother would not allow be access to my own money until she had to at the age of 18. As a result, when I got that first student card at 17 I used it religiously and always paid it off with cash I stashed away. Who would have thought it would have led to an excellent credit score and the absolute best mortgage rate you can get?

I do love how credit is a case where you are considered Guilty until you are able to improve your Innocence. I can only imagine what my great grandparents would think of the idea you now HAVE to get a credit card to function in society.

Here is what Martin Lewis has to say. He is UK based but full of information, and he genuinely wants to help people.

https://www.moneysavingexpert.com/loans ... dit-score/