Why Living at Home May Boost Your Credit Score

March 29th, 2017 | Author:

[M]any Millennials have either continued living with their parents or moved back in with them. Other generations have also become multigenerational households for one reason or another. This living arrangement offers a great advantage for anyone hoping to establish or rebuild their credit.

A Chance to Save

One reason people have moved in with their families is because they can’t afford the expenses of living on their own. Some Millennials have chosen to stay at home rather moving out because they don’t have enough to buy or even rent the kind of place they want.

This choice allows you to save your money for a down payment on a home or to pay off old debts. If you want to give your credit score a boost, save the money to pay off a credit card with a high balance or old medical debts or collections. Without the expense of rent payments, utilities and other living costs, you can pay off debt sooner, which will increase your credit score.

Practice Real Life

Those who want to succeed on their own after they move out should use this time to understand how real life works. Some parents will ask or require their adult kids to help with costs, similar to what it would be like living on their own. At the same time, they won’t charge as much as a landlord, which makes it easier to get used to having regular bills.

During this time, you should create a budget, including savings, so that you can figure out how much you can afford once you move out on your own. It’s a good idea to build your savings account while you have fewer expenses. Then, if some unplanned emergency should arise, you can deal with it without ruining your credit rating.

Anyone who wants to have good credit and a good life should use the time spent living at home wisely. Build a safety net with a savings program, save for the future and pay off bills before you start having more expenses of your own.

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