Millennials have an average credit score of 625 (based on the Experian VantageScore 3.0 credit score), compared to 650 for Generation X and 709 for those over 50 years old. They also use an average of 43 percent of their credit limits—compared to 34 percent nationally—and their average debt (excluding mortgages) totals 77 percent of their income, compared to 49 percent nationally. Such low scores can be attributed to Millennials’ thinner credit histories: one missed payment looks much worse without years of responsible credit to back it up, whether it’s aberrant or not.
Sometimes, stains on a credit report have nothing to do with the individual. A 2012 study by the Federal Trade Commission revealed 26 percent of 1001 participants identified at least one error on at least one of their credit reports. A follow-up study published this year revealed a large number of the participants still had unresolved disputes on their credit history.
According to a report by public policy think tank Demos, poor credit is linked to unemployment, lack of health coverage and medical debt. People of color are disproportionately likely to report poor credit.
