Many millennials have already or are getting ready to leave college and enter the "real" world, and some are finding themselves struggling to get going because of bad credit. In a recent survey from the firm OppLoans, 46% of millennials feel that their low credit score is holding them back in life.

From buying a house or a car, to applying for credit cards, credit controls a big chunk of our lives. Unfortunately, millennials are the age group having the hardest time adjusting to the real world due to their credit.

Millennials and Credit Scores

Millennials Can't Get Ahead Because of CreditIn the survey, OppLoans asked 2,000 US adults in June of 2018 what they thought about their current credit situation. These are the quick facts they discovered:

  • 27% of millennials said a bad credit score prevented them from buying a new car
  • 26% said their poor credit caused them to be turned down for a loan or line of credit
  • 25% said poor credit affected their chances of getting a house or apartment
  • 14% said they lived with roommates because they can't rent on their own as a result of bad credit

Although millennials feel their low credit has impacted many of their big purchase decisions, the good news is that things are looking up for them in the near future. Millennials’ average credit score is currently around 638 according to Experian, and has actually increased by four points since 2016. This means millennials are finding more ways to improve their credit, possibly as a result of increasing incomes and lowering their debt.

Credit Building Tips

When you’re looking to build up your credit, the key is to focus on the two biggest factors that affect your credit score: your payment history and your credit card utilization.

Your payment history makes up 35% of your FICO score, making it the biggest factor that affects your credit. Every monthly payment on credit cards and loans is recorded to the credit bureaus and affects your credit score. Therefore, it’s extremely important that you keep up with all your monthly payments by paying them on time and in full.

Some of your monthly payments, such as rent or utilities, aren't always reported to the credit bureaus. However, there are services that do report these non-traditional payments, which can give your credit score a boost. Our trusted partner will report your rent payments to give you the credit you truly deserve.

As for credit card utilization, or the percent of your credit card limits that you're using, it’s important you keep it as low as you can – around the 30% mark or less, if possible. To calculate your credit utilization, take your current balances on your credit cards and divide the sum by your credit limits. If you have more than one credit card, make sure you add your current balances and divide that lump sum by the total of all your credit limits.

How to Improve Your Score to Buy a Car

If you’re in the market for a car, the good news is you don’t need to have excellent credit to find financing. The trick is to find a subprime lender to work with if your credit is less than perfect. Make sure you view your credit score and at least one credit report to know where you stand, then calculate a budget for your auto loan. Once you’re ready to find a lender, you can start with us here at Auto Credit Express.

We work with a nationwide network of dealerships that have the lending resources and know-how to handle consumers with credit challenges. Take the first step and fill out our auto loan request form today! It’s free of cost, and there’s never any obligation to buy.