NOTICE: Effective Thursday, March 19, 2020 several of our branch offices will be closed. The following branches will remain open: San Jose, Santa Teresa, Dublin and Cupertino. All branch ATM’s will remain operational, and all branches are scheduled to be open again on Wednesday, April 8th although this date may change. Click here for more information.

  • The More The Merrier

    Chris O'Shea

    How having less debt ends up hurting young people 

    You should be cautious with your money, up to a certain point. According to a recent study from VantageScore, young people are less likely to take on new debt — even as their finances improve — than older people. That sounds good. However, the issue is that many lenders still perceive cautious borrowers as risky, and that’s not good at all.

    The thinking from lenders goes like this: Usually, as a person increases their income and savings they also need to add debt, from things like a car loan or new credit cards. These people add more debt because they know — or at least think they know — that they can handle the debt effectively. Therefore lenders consider people with more debt less risky, so lenders offer them the best interest rates. VantageScore’s report might change that. The study found that Millennials with fewer credit accounts (two or less) have higher or equal levels of income and assets than Millennials with more credit accounts (three or more). One reason Millennials are flipping this script is that they tend to be more focused on paying down one debt before taking on another debt.

    While paying down debt before adding more seems like a solid move, some lenders don’t see it that way. One fix? Card companies could get creative and give Millennials the chance they deserve. On the Millennial’s side of things, they should recognize that lenders see more debt as a good thing, and take on debt responsibly. As odd as it might seem, adding a card or an affordable car loan can be a good thing.

    Back to Blog

    Leave a Comment


    characters remaining


Give Us a Call

We look forward to chatting with you.

(800) 553-0880

For new loan related inquiries, call

(877) 988-0471

View Our Contact Info

Visit Us in Person

We’re here to serve your needs in person at our San Jose Headquarters. Visit us at 2010 N. First Street, San Jose, CA 95131.
Get Directions

Want More Info?

Interested in learning more about all we have to offer? Receive personal finance tips along with emails focused on key topics. You can even sign up for our monthly newsletter.
Request More Information