Millennials & Student Loan Debt
According to CoreLogic, millennial renters (aged 20-34) who have student loan debt also have higher credit scores than those who do not have student loans. CoreLogic used the information provided on rental applications and the applicants’ credit history from credit bureaus to determine if there was a correlation between student loan debt and credit scores.
The results may be surprising, as there is so much discussion in the news about student loans burdening millennials and holding them back from home ownership, investing for retirement, etc.
The analysis concluded:
“Student loan debt did not prevent millennials from access to credit even though it may delay their homebuying decisions.”
In fact, those with a higher amount of debt actually had higher credit scores.
“Renters with student loan debt have higher average credit scores than those without; and those with higher debt amounts have higher average credit scores than those with lower student loan debt amounts.”
Real Estate Bottom Line
Millennials may become the most educated generation in our nation’s history. However, this leaves them with a large amount of student debt. Fortunately, there is a light at the end of the tunnel:
“Despite the fact that student loan debt has grown into the nation’s second largest consumer debt, following mortgage, and has created a significant financial burden for millennials, it does not appear to prevent millennials from accessing credit.”
Millennials are projected to be a large percentage of all home buyers in 2017.