The Average Millennial Has This FICO® Score -- How Do You Compare?

Hint: It's not particularly great.

The higher your credit score, the easier it becomes to qualify for a new credit card, auto loan, mortgage, or apartment lease. And on the flip side, poor credit can not only wreck your chances of getting to borrow money when you want to, but in some cases, actually impact your ability to land a job. 

Unfortunately, millennials have a bit of work to do on the credit score front. Credit bureau Experian reports that as of the fourth quarter of 2018, the average FICO® Score among millennials was 665. That's considerably lower than the average national credit score of 701, and it means millennials have some work to do.

665 is not a great score

Credit scores range from a low of 300 to a high of 850, which represents perfect credit. Here's how FICO breaks down different credit scores within that range:

• Poor -- under 580
• Fair -- 580 to 669
• Good -- 670 to 739
• Very good -- 740 to 799
• Exceptional -- 800 or higher

This means that the average millennial has a credit score in the "fair" range, just below "good." And that, frankly, isn't great. 

A credit score that falls below "good" means you may not get approved the next time you want to borrow money. And even if you do get approved, you won't score the most competitive rates out there. 

Consider this: At the time of writing, if you're applying for a 30-year fixed $200,000 mortgage with a credit score of 760 or above, you might qualify for an APR of 3.358%, resulting in a monthly payment of $882. With a decent but lower score between 680 to 699, that rate climbs to 3.757% with an associated monthly payment of $927. But if your credit score is only 665, the rate you're looking at is 3.971%, which brings your monthly payment up to $951. As such, having not-so-great credit can cost you money -- which is why it pays to work on improving your score.

Boosting your credit score

If you'd like to see your credit score climb, there are a few key steps you can take to make that happen. First, pay all of your future bills on time. That will help improve your payment history, which is the single most important factor that goes into calculating a credit score.

Next, work on keeping your credit utilization ratio as low as possible. That ratio speaks to the amount of credit you're using at once. For example, if you have a total line of credit of $10,000 and $4,000 in outstanding credit card balances, you're at 40% utilization. Ideally, your utilization should be limited to 30% or less, so if that's not the case, paying off a chunk of existing debt should improve your credit score. Incidentally, so will raising your credit limit, as long as you don't use it to rack up more debt. So it's worth contacting your credit card issuers and seeing if they'll grant you more purchasing power. If your accounts are in good standing, there's a strong chance they'll comply.

Finally, check your credit report regularly for errors, and dispute any inaccurate information that works against you, like a certain debt listed in your name that actually isn't yours. That sort of thing can happen when someone has the same name as you, or a similar one. If you find an error and dispute that data point, you can get it taken off your credit record which could improve your score. 

You're entitled to a free copy of your credit report every year from each of the three major reporting bureaus -- Experian, Equifax, and TransUnion. A good bet is to request a different credit report every four months so that you're continually keeping tabs on what's on your file. 

Though the average credit score among millennials isn't awful, it's not particularly great. If your score is somewhere in the ballpark of 665, take steps to improve it. Doing so could save you money and open the door to key borrowing opportunities when you need them.