It might seem like millennials catch flack for a lot of things, but not knowing their credit score shouldn’t be one of them. A recent survey from Discover found that a whopping 93 percent of millennials are aware of their credit standing, up from 77 percent in 2018. Meanwhile, millennials appear to be more in tune with their credit than their Gen X and baby boomer counterparts. 

These were some of the key findings of the Discover Credit Health Survey 2019, which offers an interesting look at how Americans think about their credit scores, including their awareness of how it’s calculated, how it impacts their day-to-day lives, and how frequently they think about it and check it. 

A consumer’s credit score is a combination of five major factors that are compiled by each of the three major credit bureaus: payment history, credit utilization, length of credit history, new credit and total accounts. This score is used as a factor in determining everything from the interest rates consumers pay for car loans and mortgages, to insurance premiums, mobile service agreements and credit card approvals.  

A Critical Time for Credit

With credit card balances for Americans continuing to creep up, according to NewsWallet, it’s even more important for consumers to educate themselves about what factors influence their credit scores and understand the impact they can have on their financial destiny. 

Though millennials (those born between 1985 and 2001) are often characterized by their penchant for pricey pressed juices and avocado toast, according to this survey, they appear to be the most enlightened generation when it comes to credit awareness – and they’ve made significant strides in the last year. 

In 2019, 79 percent of millennials indicated that they think their credit standing affects their day-to-day life, versus 49 percent in 2018. By contrast, in 2019, just 52 percent of Gen X and 35 percent of boomers said they believed that their credit score impacts their daily lives. 

Notably, more than half of millennials surveyed indicated that they would give up social media in exchange for an excellent credit score. Nearly half of Boomers, by comparison, said they would not give up anything for an excellent score. 

To be fair, credit scores may be on the minds of millennials because one of life’s biggest credit events – buying a home – is, has been or will soon be on their radar.  Since last year, slightly more people say they have faced obstacles along the road to home ownership. Half of prospective American home buyers age 18 and older have encountered some setbacks as they attempted to buy a house, and the National Foundation for Credit Counseling cites poor credit as one of the top five barriers to home ownership. 

A Significant Knowledge Gap

Although Americans appear to be more aware of their credit score, the Discover survey suggests that they are less optimistic about their credit score in 2019 than they were in 2018. 

In 2019, only 48 percent of respondents thought they had a very good score or above, compared with 54 percent in 2018. While total outstanding revolving debt crept up 3.2 percent in the first quarter of 2019 compared with the year-ago quarter.

Some of this decline in confidence may be due to greater access to credit score information and a growing awareness for what constitutes good credit. With that awareness come efforts for improvement. Across all generations, 56 percent of respondents said they are actively trying to improve their scores. 

Nevertheless, Americans of all ages could stand to brush up on their credit IQ. Knowing your credit score can help you understand if you’re likely to be approved or even pre-approved for a credit card – you can find out if you pre-approved for Discover’s credit cards by filling out a pre-approval form. In Discover’s survey, fewer than half of respondents correctly said that payment history has a direct impact on their score, while 18 percent incorrectly indicated that income influences credit scores; it does not. 

To find out your credit score for free, visit Discover’s Credit Scorecard.

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