Committed to watching trends (legal and otherwise) that affect the lives of consumers, FindLaw.com has recently announced a survey asking young borrowers how they have fared in the current credit and loan market. Considering the tight hold on credit still exhibited by most lenders, not surprisingly the answer is often, not too well.
Cited by Consumer Reports Money Blog, the FindLaw survey reflects the fact that those who have had little opportunity to build up much of a credit history are having a difficult time getting loans as well as credit cards. More than one in five (22%) people between the ages of 18 and 34 have been refused a mortgage, loan or credit card within the last year. That's more than twice the percentage of any other age group and they are four times more likely to say they've been turned down than people age 55 and up.
More specifically, 4% say they have been turned down for a mortgage, a home equity loan, a car loan, or a student loan in the last year. Of those surveyed, 2% have been turned down for mortgage refinancing or a small business loan and 1% for a home improvement loan. The numbers shoot up however, when it comes to credit cards. A significant 15% of those surveyed were turned down for a credit card in the last year.
It should also be noted that the numbers can vary a bit depending on the race of the loan or credit applicant. For example, of those requesting mortgages, only 1% of whites were refused, while for African-Americans and Hispanics the numbers increased to 3% and 6% respectively.
"Borrowing money - whether a mortgage, loan or even a credit card - often involves meeting strict standards set by the financial institution," said Stephanie Rahlfs, an attorney and head of the Social Media Team in FindLaw's Sunnyvale, California, office. "And it can be particularly difficult for younger people, who often have had less time and opportunity to establish a credit history, work history, etc. Monitoring your credit score, correcting any errors in your credit report, and building a good history of managing credit and loans can help increase the chances of being approved for a loan, mortgage or credit card down the road."
Keeping a close eye on your credit report and spending is good advice for all ages as the economy slowly makes its way back to health.