Antonina Levashenko, Head of International Best Practices Analysis Department at the Gaidar Institute, explained the reasons for low credit rating of young Russians in a commentary for RTVI. She believes the problem is related to the specifics of financial behavior, which make the bank considering risks of defaults in a payment.
The expert cited the lack of credit history among young borrowers and the instability of their income as the main reasons. "A young borrower may have no credit history at all, no experience, making it difficult to determine their credit quality," noted Antonina Levashenko. Furthermore, informal employment is common among young people. "Young people often prefer to look for 'easy' and quick money online, for example, as content managers or on marketplaces, which, accordingly, does not require formal registration, meaning the bank cannot trace the source of income," she explained.
Another factor is psychological characteristics and the influence of marketing. "Due to neurobiological ageing factors, young people may be less disciplined in their repayments, inconsistent, and impulsive: it's risky to arrange home equity loans with a bank without a commitment to long-term, consistent repayments. Furthermore, this generation is particularly exposed to various influencers, “consumer culture” and the desire to get rich quickly through get-rich-quick schemes and immediate satisfaction of needs, rather than the desire to work long-term and accumulate wealth," noted Antonina Levashenko.
To address the problem, the expert proposed systemic measures. These include introducing short mandatory courses on financial behavior in schools and universities to teach how to manage credit history and credit ratings. She also recommended that banks expand their range of children's financial products to foster savings skills from an early age and develop special small "practice" loans with simple terms for building a credit history. An additional measure could be individual financial counseling for young people before taking out large loans.