How the cost-of-living crisis is creating a lost credit generation
We’ve quietly built a system that punishes ordinary mistakes for years, while failing to reward everyday responsibility, writes Thomas Eyre
For many under‑40s, it doesn’t just feel harder to get ahead than it was for their parents, it genuinely is. You can be in a “good” job, paying rent, juggling bills, doing what you think is responsible, and still find that one missed payment haunts your financial record for years.
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A late phone bill, a missed Buy Now, Pay Later (BNPL) instalment, or an overdraft you didn’t clear can become long‑term red flags on your credit file. Those marks don’t just make borrowing slightly more expensive, they can lock people out of mainstream credit altogether and push them towards high-cost options like overdrafts, high-interest credit cards and subprime lenders to get through the month.
We’ve quietly built a system that punishes ordinary mistakes for years, while failing to reward everyday responsibility.
At the other end of the spectrum, a growing number of young adults have no footprint at all. They’ve avoided borrowing, focused on “living within their means” and perhaps built up some savings.
Yet, when they try to finance a car, move into a rental property or apply for a mortgage, they discover that a thin credit file can be as much of a barrier as a damaged one. The result is a deepening divide between those already inside the system and the huge “pre‑prime” group doing the right things, but unable to prove it on paper.
Add rising rents, insecure work, student loans and the normalisation of BNPL, and you have a generation whose “everyday” debt is eroding not just their bank balances but their financial resilience.
It’s hard to plan, save or even imagine owning a home when a single unexpected bill can derail everything. Some of this is structural. A stronger credit profile can’t lower house prices or interest rates, but it can make a difference to whether someone is approved.
That’s why we need to make credit scoring radically more transparent, so people can see in plain English how their behaviour translates into access to appropriate credit instead of having to decode jargon. Confidence comes from small habits: checking your credit file, setting up affordable regular payments, and building a buffer.
It’s almost never about a quick fix, it’s about stacking consistent habits over time. Once people understand what their credit profile is telling lenders, and what they can do to improve it, anxiety drops and a sense of control rises.
We need systems that recognise everyday responsibility positively, such as regular rent and bills paid on time, instead of only showing up when something goes wrong. We need to treat financial education as an ongoing, adult process rooted in how people think and feel about money, not a one‑off lesson at school or a list of acronyms they’re expected to memorise.
The goal is building better borrowers, not just better credit scores. If we want young people to have a realistic chance of building a future rather than simply surviving month‑to‑month, we need far better education and transparency around how the system really works.
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Thomas Eyre is the CEO and Co-Founder of Loqbox.
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