Why Millennials are suddenly super-aware of their credit scores (and tips for improving your own credit game)

Everybody knows that bad credit leads to roommates.

Yet there was a time in very recent history when, especially for young people, one’s credit score was a old thing that nobody cared about anyway.

Those times have changed. Discover released its annual Credit Health survey and found that Millennials’ cognizance of their credit score has increased substantially in the past two years – by thirty-six percentage points.

Today, Millennial knowledge of their credit score has reached almost full saturation, with 93% aware of their number. Just two short years ago, however, only 57% knew their score.

They’re beating out Gen X, 79% who say they are aware of their score, and Baby Boomers, 73% of those who say they’re tuned in to their credit.

What happened?

It got easier

What caused the jump of almost total saturation of credit awareness from only half in two years? Stefanie O’Connell, a Millennial finance expert, has some ideas. For one: it’s simply gotten easier to access your score. Discover, she said, was the first to allow everyone (customer or not) to use their Credit Score Card starting in 2016. Now, most people can check their credit from their various credit cards or apps.

“Opportunities like that make it a lot easier and what it shows us is that accessibility matters and ease matters,” she told Ladders. “That goes such a long way in driving your own financial literacy and awareness of your own financial life.”

Millennials grew up

The oldest Millennials are inching towards middle age, O’Connell said, and the youngest part of the generation is graduating college. Either way, “the entire generation is now in adulthood.” And that means that they need to do adult things, from renting an apartment to getting financing on a home they’re buying to getting married (and checking their prospective mate’s credit score) – all things that require credit awareness.

“This is a period of life where access to credit is just such an important part of what you are and aren’t able to do in your day-to-day life,” O’Connell said. It’s suddenly real – “it’s something that affects where you can live and if you can move out of your parent’s house.”

Indeed, according to the survey, Millennials were most likely, at 78%, to believe their credit standing had an effect on their day-to-day life.

Saying on top of your credit score – and ways to improve it?

According to the survey, 82% of respondents said they checked their score at least once in the last year, up 10 points from 72% in 2017. Interestingly, 73% of consumers think about their credit score at least once a month.

“The way I think about this practice of checking your score and anything financial – checking your bank account balances, checking your investments – I think about it like a fitness practice,” O’Connell told Ladders. “It’s like I don’t go to one yoga class and consider myself fit for life, right? I go on a regular basis because I need to maintain my health. I think we can think of our credit the same way.”

Here are some tips that O’Connell recommended to improve your credit.

Automate bill payments to be guaranteed on-time 

“The most important factor in your credit score is your payment history,” said O’Connell. So you want to pay on-time, every time – and an easy way to do that is to automate your bill payments, she says.

“I can set up alerts to alert me three days before my credit card statement is due, for example, to make sure that I’m not missing a payment because I know that’s going to have an impact on my credit score.”

Pay down credit card balances

“Things like your debt-to-credit ratio, that’s another huge part of your credit score and that’s how much of your available credit are you using at any given time,” said O’Connell. “So if you have a $1000 credit card balance and you’re using up $900 worth, it’s like a 90% usage. You really want to get that usage down closer to under 30% or 20%, 10%. If you can pay down those balances that’s a really great way to boost your score quickly.”

Advanced level: ask for a credit limit increase
“I really say this if and only if you are making payments on time and you can keep up with that and you know you can continue to keep up with it,” said O’Connell. Think of this as an advanced-level move. If you can ask for a credit limit increase that’s another really fast way to improve your debt-to-credit ratio. So if all of a sudden I have a $5000 credit card limit and a $900 balance, well that $900 balance is no longer 90% of my available credit, right? It’s a lesser percentage and so that contributes to having a good credit score.” That said, don’t spend your credit increase once you get it!

Keep your oldest credit card open

You know, that one that’s been hanging around since your 20s? “I keep making payments on it and I keep that credit line really active and in a healthy and good position.

As for finally and totally improving your credit score and seeing your points jump by 100, O’Connell says it’s a long game, and patience is key. “It’s not an exact science.”