A Gen-Z guide to improving financial health

Discover how good financial habits can boost your credit score — unlocking doors towards achieving long-term financial goals

The latest TransUnion Consumer Pulse Survey revealed that 96% of Gen Z (born 1995-2004) Filipinos believe that access to credit and lending products is important to achieve financial goals. However, only 29% of them reported having sufficient access to credit, and 50% of Gen Z Filipinos plan to apply for credit or refinance existing credit within the next year.

Access to credit is an important step in everyone’s financial journey. Effective access helps improve financial inclusion, where more people can utilize financial products and services that respond to various needs.

With more banks and financial institutions willing to lend funds, these organizations determine an individual’s eligibility and creditworthiness by using multiple inputs, including information given by the applicant as well as by accessing and assessing their credit score. By considering a person’s payment history, length of credit history, money owed, and mix of credit, a ‘good’ credit score could help secure a loan to serve as capital for a business, the funds to purchase a car or a house, or the means to get back on one’s feet after an emergency.

In the Philippines, consumer attitudes to credit are changing. The TransUnion survey also found that 40% of Filipinos believe in the importance of credit monitoring, and almost half (48%) think that their credit score would improve if businesses leveraged non-standard information as part of the assessment of their credit score.

As the first international private credit bureau in the country, TransUnion was established in the Philippines in 2011, leveraging alternative data assets where traditional financial data isn’t available to give a traditional credit score. Alongside products and services that harness the power of information, TransUnion believes enhancing consumer credit literacy and helping people develop good financial habits can help unlock more credit opportunities for Filipinos.

Here are some tips to help Gen Z Filipinos develop good credit scores and improve their financial health:

Build good credit habits early

With more Gen Z Filipinos entering the workforce, this creates more opportunities for them to participate in the formal financial system. Applying for a credit card is a good first step towards building one’s credit history.

Apply for different kinds of credit

Successfully paying off a variety of credit types can make a good impression with lenders. This is considered one of the fastest ways to build a credit score.

Avoid applying for multiple credit cards and loans at the same time

Applying for too many credit cards or loans at the same time can signal a problem and be seen as an indicator of financial stress. Multiple applications and refusals can even damage your credit score.

Manage your minimum payments

Regularly paying above the monthly minimum is a good indicator of sound credit management. Not only can credit balances be paid off faster but going above the minimum can help save money in interest payments as well.

Make payments on time

Credit commitments, including utilities such as telco bills, must be paid on time. As banks and financial institutions use credit history to help make their lending decisions, evidence of prompt payments can help increase your chances of securing a loan.

Credit is an important way to empower consumers to achieve their financial goals. However, credit and loans are big responsibilities, which is why good financial habits are needed to manage them effectively. As more Gen Z Filipinos enter the workforce, financial services must be made accessible for more Filipinos to pursue a better life. To learn more about your financial health, apply for a TransUnion Credit Report today.

PIA ARELLANO has over 25 years of industry experience across banking, payment solutions, telecommunications, and remittance services. She has been instrumental in establishing TransUnion as a risk management and data solutions and insights partner of banks and financial institutions in the Philippines.

Email questions to tuphcomms@transunion.com.

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