Turns Out Millennials are Better at This Than Most Give Them Credit For

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Millennials are killing _____.

Millennials are bad at _____.

Millennials need more _____.

Go ahead. Fill in the blanks, and you’ll probably find it in a recent news headline.

But not all things “millennial” are bad.

(Disclaimer: I am one.)

So, despite a report from LendEDU about millennials and their “average at best” knowledge of credit scores, I’m going to put a positive spin on this one with the idea that we’re on a good track and can continue to improve.

How Much Do Millennials Know About Their Credit Scores?

LendEDU polled 500 millennials between the ages of 17 and 37 about credit scores.

Here are some positive, clapping-hands-emoji-worthy numbers:

  • Nearly 80% of millennials have checked their credit score. Of that number, 47.47% have checked it within the past 30 days. You could highlight the fact that approximately 20% of millennials have never checked their scores, but to be honest, I didn’t check mine until I was 21, and had no reason to do so before then.
  • Close to 75% of millennials could identify the correct definition of “credit score.” For context, compare that to the one in three Americans who can’t define basic financial terms and, more specifically, 37% of folks who can’t define 401(k).

This is a great start, in my opinion.

But what about the actual scores?

Millennials Don’t Have the Best Average Credit Score, TBH

So we do have room to improve our credit scores.

The LendEDU study found that the majority of millennials (at nearly 30%) had a “fair” FICO credit score, ranging between 580 and 669. Nearly equal in percentage, 28% of respondents had “very poor” credit scores, ranging between 300 and 579.

These numbers align with Experian’s 2016 “State of Credit” report. Millennials have an average VantageScore of 634, while Gen Xers have an average of 655 and Baby Boomers sit pretty at 700.

So Why Do Millennials Have Only OK Credit Scores?

It’s not because we’re the worst at everything.

If you take a look at the generational statistics listed above, you’ll see the older the generation, the better the score.

Although my natural inclination is to say, “Yeah, just give us some time,” I reached out to an expert — Rod Griffin, the director of public education at Experian.

“Millennials aren’t really that different than anybody else,” he explains. “We always seem to talk about millennials like they’re a completely different group of people. In reality, they’re no different than anyone at that stage of life has been from generation to generation.”

This goes for a lot of things, including credit scores.

Griffin said scores, if they’re taken care of, will improve with age and experience.

“Your skills will build and your knowledge will build over time,” he says. “When you’re in your mid-20s and early 30s, you’re really just beginning to build credit.”

And as for those 17- and 18-year-olds, many of them don’t even have credit at that point, so there’s no reason for them to check their credit report unless they’ve talked about it in school — which typically isn’t the case.

Griffin has another theory, too, which is the same reason millennials are hesitant to invest.

“The thing about millennials is that they came of credit age when our economy was suffering, and they say the challenges their parents had, so for a number of years, millennials were far more reluctant to have credit cards than any other generation,” he explains. “So that could play a part because they equate credit cards and credit with debt and that can affect credit scores adversely.”

(Think: credit history.)

Millennials: Here’s How to Build Credit

Griffin’s biggest piece of advice for millennials is to be patient.

“It’s just a matter of time and patience and continuing to do smart things,” he says. “Scores improve with age. And, really, I think it has less to do with age, and more to do with experience. It’s just one of those things.”

Millennials also have tools to manage their credit right at their fingertips.

The first step is to check your credit reports at least once a year. Try using a free tool like Free Credit Report.

Know what to look for when you’re perusing your credit report. Find areas you can improve upon or debts you can pay off.

In the end, Griffin urges millennials to just keep learning because, “the more knowledge you have, the more successes you’ll have.”

Good luck, millennials! (We don’t suck so much after all.)

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. She has strong feelings about those millennial headlines.

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