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Millennial money: Here are tips to increase your odds for credit approval

Before you approach a lender, be aware of

Before you approach a lender, be aware of what story your credit report tells. Check on your credit scores and report any mistakes to your creditors, experts say. Credit: Getty Images/iStockphoto/fizkes

Credit has been hard to come by for millennials. According to new research from, 32 % of millennials surveyed were denied a financial product this year because of their credit score. The details breakdown like this, 19% were rejected for a credit card, 8% for a car loan, 6% for rental applications, 5% for mortgages, insurance and utilities or home services and 7% for other loans.

Ted Rossman,’s credit card analyst, says lending standards tightened considerably in 2020 due to COVID-19 and economic uncertainty. "In the second quarter, 72% of surveyed banks said they tightened credit card lending standards and 0% eased them. Lenders are much more selective about who they approve," Rossman says.

This impacted would-be borrowers of all ages, and millennials had additional factors that figured into their failure to get credit. What’s tripping them up and better still, how can they up the odds that they won’t get denied credit and other financial products?

The backstory

Many millennials are running into credit issues, mostly due to the amount of student loan debt they carry coming out of school, says Leslie Tayne, a debt resolution attorney with the Tayne Law Group in Melville. "That combined with mass layoffs during the pandemic made it more challenging for them to tackle debt," she says.

Without an emergency fund they go into debt just to survive, and have trouble making their debt payments on time, explains Deborah Jacobs, a financial coach with Money Smart for Life in Somerville, Massachusetts.

Paying bills late, especially credit card bills is a sure way to ding your credit score. Another no-no is maxing out credit cards. "Credit scores go down when you use more than 30% of your available credit; the less you use, the better," Jacobs says.

How to move forward

What you want to know though, is how to make it tougher for lenders to say no to you. Know before you go. In other words, before you approach a lender, be aware of what story your credit report tells. Check on your credit scores through the three major agencies, Equifax, Experian and TransUnion to ensure their accuracy. Report any mistakes to your creditors, ask them to fix them and notify the credit bureaus about the error. is providing free credit reports once per week until April 2021. American Express allows you to check your TransUnion VantageScore for free and Credit Journey and Chase will enable you to check your Experian VantageScore, Tayne reports.

Consider programs such as Experian Boost (which incorporates cellphone, Netflix and other payments that have not historically built credit) and eCredable (which builds in a variety of utility plans that didn’t used to count). "These can help lift your score quickly," Rossman says.

Think things through. Make sure you have at least three months of verifiable income. "If you lost your job this year because of the pandemic but recently got hired, wait until you have at least three months of paystubs before you apply for a financial product," says Chad Rixse, director of financial planning at Forefront Wealth Partners in Austin.

Remember less is best. You shouldn’t need more than one or two credit cards. Instead of packing your wallet with plastic, "focus on building a solid credit history showing you can manage your existing liabilities with timely payments," says Pinky Shah, a home mortgage strategist at Fairway Independent Mortgage in Jamesburg, New Jersey.

Length of time is important when it comes to your history. If you have unused cards that you’ve had a long time, don't close them.

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