There’s a lot of conversation about the future prospects of millennial home buyers, and what it means to the health of the real estate industry. But here’s the catch: Many of these younger buyers don’t have established credit scores. In fact, a surprisingly high percentage are averse to all forms of traditional credit.
The Fast Company article “Why Lending Startups Like Float Want To Ditch The FICO Score,” takes a look at some interesting information about millennials and what that means for lending institutions. According to the piece, “One-third of millennials have never bothered to apply for a credit card, and the percentage of Americans under 35 with credit card debt is at its lowest level in more than 25 years.” How will they buy homes if they don’t establish credit?
Get an education on what might be the “next wave” of consumer lending by reading this piece. It discusses banks and startups who are abandoning FICO scoring for their own underwriting purposes, and how those models work: