Are you a millennium? Do you know your credit score? Then you are one of the few. Millennials know less about their credit scores than previous generations, according to a study released last month by the Consumer Federation of America and VantageScore. The results of the study show that students know less about credit bases and their own credit reports that most adults. Here is an overview of what the study found:
What Millennials know no credit
Their own credit report: L the study found that only 49 percent of Americans aged 18 to 34 received their credit report at least once, compared to 74 percent of adults 35 and older.
What factors affect their score: Less than half of students (47 percent) respondents knew that the age of a person was not a factor in their score credit, compared to over 60 percent of older Americans who did.
how credit scores are calculated: Just under two thirds (65 percent) of millennials, but three-quarters (75 percent) of Americans over 35, to know that the three major credit bureaus (Equifax, Experian and TransUnion) collect information on which credit scores are based.
Who can use their credit score: Only 18 percent of students were able to identify six types of businesses that may use credit ratings, including issuers credit cards and homeowners, compared with nearly a third of older consumers (32 percent).
Despite their general lack of knowledge of credit scores, millennials have not confused as experts, according to the report. Forty percent of them felt they had a good or excellent knowledge regarding credit scores, compared to 62 percent of Americans 35 and older.
Not surprisingly, people who obtained credit reports in the past were more likely to know how credit scores are determined that those who do not receive a report, the study found. Eighty-one percent of people who had obtained a credit report knew the role of the three credit bureaus in collecting information on which credit scores are based, compared to only 54 percent of people who receive not a credit report.
How to improve your credit score
There are a number of simple ways to improve your credit. First, it is important to know how to access your credit file.
You can receive a free credit report each year. The report lists your financial behavior, including a register of companies who examined your file, any late payments you might have and the number of personal information, such as applications or credit card loan you requested . If you want to check your reports and scores more than once a year, you can sign up for a credit report services that will give you updates more frequent monitoring day.
Once you are aware of how your credit score is affected, it is easier to control.
1. Pay your bills on time every month More than a third of your credit score is based on payment history. If you are late on a payment, it will hurt your score. Do not pay your bills at all even greater impact on your credit.
2. Keep balances low: Make sure you are not using more than 30 percent of your total credit. Ideally it should be between 1-10 percent. Your credit utilization ratio is the total balance you owe divided by the amount of available credit you have. For example, if you have $ 15,000 available credit value and need $ 3000, your credit utilization rate would be 20 percent. Maxing out your credit cards not only hurts your credit, as it represents 30 percent of your total score, but it also leaves you vulnerable if you need to make a big purchase.
3. Do not apply for too much credit: At the opening of new credit lines is one of the ways you can increase your score, you can seem hopeless for credit. Each time you apply for a new credit line, the lender makes a hard inquiry on your credit report. Your score can be reduced if you have too many hard inquiries on your file at any given time. Just apply for a credit card at a time, and only apply for approved credit cards for your credit score, or you will be turned down and have to apply again. Here is a good list of the best credit cards for your credit score.
4. Watch your credit: Make sure your credit report is accurate. A 2013 study FTC found that 26 percent of people find errors on their reports, which could affect their scores. You can register for a free trial of credit monitoring service here.