Skip to main content

The Millennial's Guide to Establishing Credit


The Millennial's Guide to Establishing Credit

     One of the issues I hear raised most often regarding Millennials surrounds the topic of credit cards.  It's often reported that they have an aversion to them ...

     I'd have to say that's backed-up by my experiences as a LO  too.  It's no longer that rare to talk to a Millennial-age hopeful homebuyer that has no credit card.

     Given the recent financial crisis we passed through, I get the reasoning and sentiment behind their avoidance of debt.  If you don't have credit cards, you're not as likely to buy things you can't afford.

     Where this becomes problematic though, is when Millennials want to buy a home.  Simply put, you have to have debt in order to apply and be approved for more.   Seemingly defies logic, doesn't it?

     But Mortgage Underwriters are looking for proof ... a documentable history or "track record" of how an Applicant handles debt.  It's part of the "litmus test" used during Mortgage Approval. 

     Don't have credit cards?  An Underwriter has little to base an opinion on regarding your credit-worthiness or how good a financial risk you might be.  

     You're much like a rookie major league hitter stepping-up to the plate for the first time in the big leagues.  Your batting average looks like a bunch of goose eggs.  

     No at bats. No hits. No runs.  And no one knows if you'll whiff ... or hit home runs.

     So, if you're a Millennial (or anyone else) that's hoping to buy a home, yet you currently have no established credit or credit cards ... what do you do?  Here's my advice:

  • Try to Remember:  Credit Cards don't have to be evil, bad things.  When utilized properly and with restraint, they actually do you good and boost your Credit Scores
  • Establish credit.  Open a functional department store account or gas card.  Use it, pay it off monthly.  Or IF you do retain any balance on that card, keep it under 30% of the AVAILABLE CREDIT LIMIT (10% or less is actually ideal).
  • If your present credit (or lack thereof) keeps you from being approved for such a card:  Establish a SECURED line of credit with a company that allows that.  The bank where you keep your savings and checking account is a great option. When establishing this type of card, you essentially "pledge" an amount ($500 - $1,000), then repay the bank or credit company over 12 regular installments to pay that amount off.

     Lastly, if unsure as to how to proceed, reach out to me (your LO).  I'll answer your questions and assist you in positioning your credit history and profile.  That way you'll meet your goals and establish the necessary credit to obtain financing for your first home.  

     *  Hoping to Buy a home in the Greater Chicagoland area?  Contact me today!  I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Gene Mundt
Mortgage Originator  -  NMLS #216987  -  IL Lic. #031.0006220  -  WI Licensed
American Portfolio Mortgage Corp.
NMLS #175656

Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281
  Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
 Trulia Acct. of Gene Mundt, Mortgage Lender   Zillow Acct. of Gene Mundt, Mortgage Lender   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender 

Gene Mundt, Mortgage Originator, an Originator with 37 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI

Referrals are Welcomed!









Popular posts from this blog

Property Addresses: Gettin' Down to the Nitty Gritty

Property Addresses:   Gettin' Down to the Nitty Gritty

Take just a second and read through the following statements ...

“The devil is in the details” 
... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"

Details ...Details ... it's all about the details ...
     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.
When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  
Sports statistics and games ... minutiae rega…

Ready for Fall? It's Arriving Soon

Ready for Fall?  It's Arriving Soon

Friend ...

Maybe it's because football season has started. Maybe it's the kids being back in school. Or because the night air is cooler. But a sense of Fall has arrived here in Chicagoland ...

The Fall Season brings changes with it. Changes in temperatures. Changes to the clothing we wear. Our focus seems to shift with the coming of shorter days, falling leaves, and crisp air.

Fall can be the perfect time to do a multitude of things. You can prep your home for the upcoming winter weather ... or for Fall listing and sale. 

But whether you're moving on or staying put, Fall is a great time to declutter and organize your home inside and out ... and your finances too.

I've googled like crazy to find interesting articles filled with Fall info, ideas, tips, and photos. Articles that will help you usher the Fall Season in at your house. I hope you enjoy reading the articles offered below and that they inspire you to make any needed changes.


Paper or Paperless billing? Which serves YOUR needs best?

Paper or Paperless billing?  Which serves YOUR needs best?

These days, companies are under pressure to go "green" and become more environmentally friendly.  As a result, an increasing number of businesses are offering their customers a paperless option with which to receive and pay their bills. 

There are obviously many positives to be found within these paperless services:

Trees are saved  Reduced postage costs  Less paper documentation to organize or save/storePossible rewards for switching to paperlessPayments can often be made/posted same-dayAutomated payments can be set-upMore
But I can tell you from my vantage point as a Chicagoland/IL/WI Mortgage Originator, there are also negatives to be found within paperless methods.  For some of my mortgage clients, the choice of going "paperless" just hasn't worked well.

 For some, an email or text reminder regarding payment of bills has not been enough. They NEED a paper billing to arrive in their mail. 

Their paper bil…