What’s happened to Gen Y?

This post has been adapted from: http://mycra.com.au/blog/2013/03/spike-credit-defaults-gen-part-housing-crisis/

Gen Y: Our future home owners

It’s a fact of life  -most of todays Gen-Y’ers are drowning in debt!
Gen Y – are reaching their late 20’s. They are the future of our housing market!

But what is the outlook like for you….?

Credit reporting bureau Veda Advantage recently released some of their data from the last three years, which showed that Gen Y holds 60% share of all credit defaults. From telco defaults through to licenced credit defaults – Gen Y tops the list in every category.

What’s more worrying is last month’s revelation from Veda about Australian credit reports. Their Veda ScoreCard revealed that 80% of credit file holders have never checked their credit history; 81% are not concerned about their credit history; 93% know they have a credit file but 53% don’t know they can obtain it; and 20% of males and 12% of females don’t really care what’s on their credit history.

When you put both of those stats together, the future is looking like a generation of Gen Y borrowers.

But within all of this doom and gloom of big default numbers – there are the Gen Yers who ‘could if they didn’t’. The ones who have great serviceability but for that telco default from 2 years ago holding them back.

If this is you, then act now so you don’t become one of those stats in a few short years time.

What are possible reasons Gen Yers have defaults:

1. They haven’t tied up loose ends. They’ve moved house, gone away for work, or gone o/s and have unknowingly left a bill unpaid. Often they don’t know they have a default.

2. They haven’t known how to dispute a bill correctly (or the importance of it) and it has progressed to a default on their credit file. This is especially true when trying to dispute bills with large companies such as Energy and Telco Credit Providers.

3. Lack of knowledge. This includes complacency. If defaults are a dime a dozen in this age group – how many are actually invalid but remain undetected and undisputed?

4. They have gotten in too deep with debt too early and their credit file has paid the price.

Its easy for Gen Y-ers to end up with bad credit – we can’t go past the notion that a lot of defaults are possibly invalid – and certainly disputable. Even the last reason in some cases can be disputed if the credit file holder had been experiencing a period of temporary financial hardship when the default was incurred.

So what can Gen Y-ers do now, to prevent becoming a permanent renter?

Start planning for the future, instead of living only for the new.

Be aware of credit issues and how the credit system is recorded

Visit veda.com.au for a check up of your credit file.

Address any credit issues you have early, so you don’t have to deal with rejection later.

www.mycra.com.au can help you clean up your credit file so you can qualify for the loan you will need to set up your future.

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