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EASY personal credit is causing problems for young adults, who are trashing their credit files and damaging their chances of borrowing money in the future.

More than half of 18 to 21year-olds do not know what a credit report is, according to research commissioned by Positive Lending Solutions.

Managing director Tom Caesar said it was a worrying trend that young people were creating poor credit histories.

“We are seeing too many of them with unpaid bills or credit card debts on their credit report, or they have gone bankrupt at 19 for an unpaid phone bill,” he said.

Positive Lending Solutions, a national finalist in last year’s Telstra Australian Business Awards, examined the credit habits of 5000 young people and found more than a quarter had made a late bill payment.