A new survey conducted by Bankrate.com has revealed that as many as 58% of all millennials who have applied for a credit card has been denied. Credit cards can be an important tool if used correctly to help build credit. The problem is, you can’t get one if you don’t at least pass a basic minimum credit score, which is exactly the problem millennials are facing.
These numbers are compared to 53% of Generation X and 27% of all baby boomers that have also been denied. It’s astonishing to see that more millennials are being denied than Gen-Xers, but that discrepancy mostly has to do with very few of that generation out in the working market and applying for credit cards. The number might increase over the next few years.
“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. “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.
Most Credit Card Rejections
Most people with bad credit are often denied car loans and credit cards. Without a clear history of on-time payments and proper history using credit, no one will trust you. It can take several years to build up your credit to the appropriate levels needed, but if you have lots of debt, that can complicate matters. Then you’re running around trying to make a lot of payments to keep your head above water.
Any small mistakes can really hurt your credit score. This is why knowing the basics behind credit will help prevent you from making those mistakes. The best advice is to get a credit card for beginners. You might have to pre-pay to use it, and the interest rates won’t be that good, but it’s a good way to get started.
One you develop a good history, your credit score will start to rise. Then you will be able to take on other credit cards to continue the process. Having a few credit cards and only using a little bit of them each month so you can pay them off completely is the smart way to do it. Whatever you do, refrain from maxing out your cards to prevent yourself from being able to pay the back reliably each month.
