Having lived through a number of economic crises, millennials and finance often make headlines. According to Experian’s Consumer Credit Review, the average credit score for millennials was 679 towards the end of 2020.
One notable observation in Experian’s Consumer Credit Review is that millennials saw the biggest credit score hike compared to other generations. At the end of 2019, the average credit score for millennials was 669. This went up to 670 in the first quarter of 2020 and jumped to 679 during the last quarter of 2020. These scores are considered fair to good credit score ranges.
Experts deduce this jump in credit score is in large part due to the unpredictable economy brought on by the pandemic. During this time of prolonged uncertainty everyone, including millennials, cut back on spending. For one thing, everyone was forced to stay home for most of the year. With restaurants and shopping outlets shut down, there was nothing to spend on anyway. The reduced spending lowered the average credit utilization ratio, contributing to a higher credit score.
On-time payment history was another factor that helped boost millennials’ credit score. Millennials stayed home and focused on paying off bills on time. This on-time payment history gave their credit score a tremendous boost.
Whether your credit score is above or below the average for millennials, there’s still lots you can do to improve it some more. A high credit score can make it easier for you to get a vehicle loan, mortgage or credit card in the future. What’s more, the higher your score, the less you’ll pay when you need to borrow money.
You can always benefit from a higher credit score. Try these strategies to boost your own score.
Payment history has the single biggest impact on your credit score. If you’re juggling multiple student loans, autopay is a great way to ensure all payments go out on time every month. No more worrying about missed deadlines, late payment fees or plummeting credit scores.
Late payments will cost you by way of fees and interest as well as a damaged credit score. If you can, pay down your bills twice a month instead of just once. This will lower your credit utilization and boost your credit score.
Credit applications trigger a hard credit pull, which will hurt your score. Multiple applications can do serious damage to your score. It can take a long time to recover from that.
An old credit card can add to the age of your credit history. Having a longer credit history can help add a few points to your score.
You are entitled to receive one free credit report every year from each of the major credit bureaus. You should request for a copy every year and review it for entries that may be damaging your score. If you find any inaccuracies or incomplete entries, dispute it with the agency and get it corrected.
Consistency pays when it comes to improving your credit score. Do each of the above mentioned items consistently to see marked improved in your score over time.
We hoped you enjoyed this article! Remember, you can compare your personalized rates with our lending partners and potentially lower your monthly student loan payments and save money.