Report: Millennials Have Lowest Credit Scores
Millennials maintained an average FICO score of 665 during the fourth quarter of 2018 compared with the national average of 701, the report said.
Millennials living in Hawaiʻi tended to fair better in the findings. The report ranked Hawaiʻi among the top 10 states for millennials with the best credit. Millenials in Hawaiʻi showed an average FICO score of 686 and a total average debt of $95,301.
According to Experian, millennials tend to be burdened by more debt because of students loans and the fallout of the 2008 economic crisis. These factors, combined with poor credit scores, make it difficult for them to obtain new credit accounts and reach certain financial milestones. In addition, their debt appears to be increasing.
The Experian report found that:
- Millennials have an average credit card balance of $5,231, up 7% year over year from $4,869 in 2017;
- Millennials carried an average of $34,770 in student loan debt, up 8% from $32,239 in 2017;
- Millennials have an average total debt amount of $80,666, up 11% from $72,988 in 2017.
For other age groups, the study found that the silent generation—those in their 70s and older—had the highest average FICO scores of 756, followed by baby boomers who scored 732. Generation Z, the youngest group of people between the ages of 18 and 22, had the same average score as millennials.
Tips for Reducing Debt
Repayment plans — Making a plan for repaying credit cards can give you the motivation to get it done. Once debts become more manageable, your credit score may improve and open new financial possibilities.
Don’t Miss Payments — Payment history is one of the most important factors in calculating a credit score. Even one late or missed payment can have a lasting negative impact.
Monitor Credit Score — Periodically monitor your credit score and look for ways to improve it. Credit scores can be the gatekeeper for new borrowing opportunities. Experian offers credit improvement tools to help increase your FICO score.