The head of a consumer advocate group is concerned that young Australians do not properly understand how their credit behaviour can affect their eligibility to obtain finance.
According to Credit Savvy, recent data from credit reporting body, Experian, shows young Australians aged 18-24 years have the lowest average credit score at 564, followed by 25 – 34 year olds at 610. Both bands are sitting comfortably below the national average of 649.
These findings also come at a time when the spotlight is on housing affordability and home ownership for the next generation.
The latest Domain Group House Price report reveals that median house prices have surged by 22.9% in Sydney by 22.9%, cracking the $1 million mark. Melbourne house prices have climbed 10.3%, reaching $668,030. Nationally, the median increased by 11.7% year-on-year to reach $701,827.
Credit Savvy is now encouraging young Australians to take an active interest in their finances. Managing director of Credit Savvy, Dirk Hofman says he is concerned that younger consumers may be unaware that their credit behaviour can stay on their credit file for a number of years and potentially impact their ability to access credit in the future.
“It’s tough enough saving up for a deposit without getting there and realising that you might’ve done something to jeopardise your credit reputation years earlier. I’d encourage young Australians to check their credit score and credit file to see where they stand,” he said.
“Even if younger consumers don't intend to apply for a home loan or personal loan for a few years, if they are proactive about managing their credit reputation now, they could set themselves up better for the future.”