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Denied! Millennial’s Battle With Credit

Combating Credit in this Era

Let’s start out by saying what everyone already knows, the credit system is flawed and predatory in many ways. The concept of paying back what you have borrowed is pretty straightforward and  providing an incentive to pay back your debts is needed, but how credit affects your life outside of your initial purchases is where we encounter some of the initial issues. Combating fraud, data entry incompetence, lack of history, credit discrepancies and general ignorance of the system stand between us and the life we are meant to live. If life is what you make it, then the person that is financing the jet ski under my name has been living my best life! 

The Necessity of Credit

Credit seems to be this metaphorical door that when opened, can lead us down a road of wonderment and bliss, but can also send us to the brink of financial destruction. When I thought of credit when I was in highschool, I believed that credit cards were to be used when an emergency arose and you didn’t have the money to handle the situation and was a factor in acquiring a home and vehicle . Now I understand that credit makes up a little bit of everything in our life; jobs, car insurance, renting an apartment, bills, the list goes on and on. Are we really living our own  life here or just borrowing pieces of it from one another until we are unable to borrow anymore? Am I just going to be stuck in a constant wage grind to keep everything paid off and my scores high? Why didn’t schools teach us how any of this works instead of the symbolism in Moby Dick and square dancing? Sit down, be quiet and stop asking questions that don’t pertain to the rich world of Geology! 

You Need Credit to Build Credit.

Is anyone else getting sick of the catch-22 that “you need credit to build credit?” As a millennial, I think I have heard this more than the phrase “You need 5 years of prior experience for this entry level position.” According to Bankrates latest survey  58% of millennials have been denied some sort of financial product due to their credit score and the rate of denial seems to increase as the years go by. I swear I haven’t been using my credit to finance avocado toast and Ricky Martin vinyls, so what is really going on and why are denial rates so high? Well, this failure rate may partially be due to legislation enacted in the last decade. “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,” says Ted Rossman, industry analyst at Bankrate. “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.” Considering that the length of credit  history makes up a little over 15% of your overall credit score, lacking this “experience” is detrimental to personal credit progression.

How Am I Supposed To Build Credit?

Building credit with no credit can seem like a daunting task due to the “you need credit to build credit” motto that resonates like nails on a chalkboard, but this is not an impossible feat by any means. My time at Credit Law Center has taught me that building credit is like building a home and that you need to form a sturdy foundation before you can begin to think about anything