Survey: 42% of Gen Z Don't Know Their Credit Score

A healthy credit score can lead to better financial opportunities for people of all ages. That includes more opportunities for loans and credit—often at better rates. But a good credit score can also positively impact your chances at getting approved for a lease on an apartment.

In fact, even a Congressman in Washington, D.C., can't always score an apartment without a decent credit score—a fact the first Gen Z rep in the nation's capital learned firsthand. 

Understanding how your credit might impact your financial life requires knowing about your credit in the first place. We conducted a survey to find out how Gen Z, in particular, understands their credit scores and whether those scores have impacted their financial opportunities. Here’s what we found.

Methodology

Note: This survey was conducted for Credit.com using Suzy.com. The sample consisted of equal parts male and female respondents aged 18-25.  The survey collected a total of 1,005 responses per question and results are not statistically representative of the general population. This survey was conducted in December 2022.

In This Piece:

• 42% of Gen Z Don't Know Their Credit Score
• More Than 1 in 5 Have Been Denied Credit Cards
• Despite Denials, Most Have Good Credit Scores
• How Can You Build Credit?

42% of Gen Z Don't Know Their Credit Score

Close to half of adults in the Gen Z demographic don't know their credit score. According to our survey, men were more likely than women to not know their credit score. Around 48% of men said they didn't know what their score was at the time they answered the survey.

Knowing your credit score and keeping up with the information on your credit reports, even at an early age, is important. Some reasons to do so include:

• Being more prepared when applying for credit or a lease. When you know where you stand with regard to credit, you can apply for the right types of credit cards, loans and leases. Applying for opportunities that require excellent credit when you have poor or fair credit can result in denials, including being denied an apartment because of your credit.
• Understanding how to build your credit. When you know what's on your credit score, you can figure out what might be causing your low credit score. That helps you proactively work to improve it in the future.
• Protecting yourself from fraud and identity theft. Keeping an eye on your credit report helps you know immediately if someone is using credit in your name so you can take action to protect yourself.

More Than 1 in 5 Have Been Denied Credit Cards

More than 20% of Gen Zers have applied for credit cards and been denied. Women were a bit more likely than men to be denied—around 25% of women responding to our survey said they've been turned down for a credit card.

We also asked about denials for auto loans, apartments, student loans and even jobs:

• 12% of respondents said credit issues had caused them to be denied a lease for an apartment.
• 12% also said they'd been denied a car loan due to bad credit.
• 8% said they had issues getting a student loan due to their credit history.
• 7% said their poor credit had cost them a job opportunity.

Despite Denials, Most Have Good Credit Scores

Interestingly, among the Gen Zers who did know their credit scores, most have good scores, and many have above-average credit scores. That's true even for the individuals who said they'd been denied a credit card. Just over half of those who'd been denied a credit card—54%—said they had excellent credit, with a score between 799 and 850. And 72% had, at minimum, fair, or good credit.

Good credit doesn't actually cement your approval for a loan or a lease all on its own. Lenders and landlords often look at other factors, including your length of credit—called your credit history age—or rental history. If you haven't demonstrated that you pay your bills and rent responsibly for a lengthy period of time, lenders may be less likely to take a chance on you.

Income can also be a factor. Creditors won't lend to you and landlords won't rent to you without proof you have the income to make your payments on time. Many landlords look for renters who make two or three times the rent each month, for example.

Lenders may also consider your debt-to-income ratio. Even if you make more than enough to afford a debt, if you're already carrying a high debt load, you might not have enough cash flow to cover a new payment. 

How Can You Build Credit?

What is a good credit score? Generally, a score that's 670 or more is considered good, and the higher your score is, the more financial opportunities you might be able to take advantage of.

Establishing good credit takes time, especially if you don't have any credit at all and need to start from scratch. You'll need at least six months of positive credit history to make a decent impact on your score. Once you establish yourself, take the following steps to keep building your credit:

• Use credit wisely, and don't max out your accounts.
• Pay all your bills on time consistently.
• Ask friends or family members with good credit if they'll add you as an authorized user on their credit card accounts—you don't have to use the card to get a credit boost as long as they manage their account well. 
• Monitor your credit frequently so you know if an error or fraudulent item is impacting your score negatively.