Most people these days are aware of how important their credit score and history can be when it comes to their financial futures. However, despite this a report has shown how many people in America are destroying their credit while they are still young. The survey, which was carried out by Credit Karma, indicated that close to 70 percent of Americans manage to destroy their credit before they even hit the age of thirty. This means that many younger people are left facing a very bleak financial future.
The information on the survey suggested that a worrying 68 percent of people in America ended up making a major financial blunder before they hit thirty, and this left a long-lasting imprint on their credit file. A number of common financial mistakes that were being made were identified in the report, with some of the most prominent issues being spending too much on credit cards, failing to make payments on time, defaulting on loan and debt payments, or ending up with debts being passed onto the debt management companies.
Potential long term effects
An official from Credit Karma said that the impact of these financial blunders varied based on their severity. She said that the more serious the financial offense the longer it would stay on a person’s credit file, which means that longer it would impact upon their lives. As a result of the Fair Credit Reporting Act, it generally takes between seven and ten years for black marks to be removed from a person’s credit file.
She added that many people, particularly younger Americans, failed to realize that something as simple as missing a payment could end up negatively affecting their credit file. This in turn could then make it more difficult for the person to get affordable credit in the future, so one small oversight such as a missed payment could end up costing them thousands of dollars over the long term.
The key concerns relating to these figures is that many people who are not yet thirty have yet to take out major loans such as car loans or a mortgage, which is something that most people need. However, by marring their credit so early on in life, many will end up paying through the nose for finance such as this and some may find that they cannot get credit at all.