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Having a credit score under 700 creates difficulties holding one job and living on your own.

If you are under age 37 with a less-than-perfect credit score, congrats. You are a part of the “new middle class” — and probably still struggling to get by.

That’s at least what a new study from financial service company Elevate is saying. More middle-class millennials report some kind of recent employment changes — including starting new jobs — than any other age group. And they have been laid off 75 percent more often than millennials with higher credit ratings.

They’re also more likely to work multiple hourly jobs and have more than one adult in the house not earning an income.

That’s not all the new middle class are dealing with. They’re more likely to live in a household with four or more people, including children. They are also less likely to be the sole decision makers in the house. After all that stress, they’re also less likely to take vacations.

How did they find themselves in this mess?

Elevate’s survey doesn’t mention the education level or social demographic of the respondents. However, they can say the majority of millennials with a FICO score of 699 and lower are living in such conditions. The next question is: Why do these millennials have lower credit?

Previous research on millennials and credit shows that two-thirds of young adults, new to credit and without any financial education, have made large avoidable financial mistakes before the age of 30. Seventy-five percent of respondents at the time said those financial mistakes had a negative impact on their quality of life.

Credit affects a lot of what we do, and how much extra we pay for the things we need. Where on the score spectrum your score falls determines how much interest you will pay on loans, credit cards, auto loans and house mortgages, and even whether you’ll get approved for those things.

Many millennials have average or below-average credit, but this can be due to many factors. Millennials are younger and establishing good credit takes years. Some may have tried to open credit when they were young. Then they made a few mistakes that dragged down their credit scores.

It could also be because they don’t want credit. Some data has shown this generation is fearful of credit cards. Whatever the reason is behind their lower credit ratings, it is dragging down their overall quality of life, and it should be acknowledged so they can build a good credit score as early on as possible.

What can the new middle class do to improve their credit scores?

They clearly don’t want to hear that eating less avocado toast will help them purchase homes, but there plenty of other things they can be doing to help build their credit.

One thing that’s easy, even if you can otherwise afford college — you can take out a subsidized student loan while in school, and pay it off while interest is deferred. Maybe apply for a student credit card, or secured credit card and show you are fiscally responsible by diligently making payments on time.

You should always keep your credit card utilization under 30 percent, and preferably under 10 percent. Utilization refers to the percent of your available credit you have used at the time of your statement. If you have a credit limit of let’s say $1,500 and have an outstanding balance of $750, that means you’re utilizing 50 percent of your credit. That’s negatively impacting your score.

Also, millennials shouldn’t be so quick to assume their aversion to credit cards will lead to financial security. Seeing your parents in debt during a recession can scare you away from credit, but a little debt is okay — as long as you monitor it, pay on time, and keep the balance manageable. The trick is not to avoid debt, but to always have the money on hand to pay it off.

Unless, of course, you enjoy working two hourly jobs and still not making the decisions in your own house.

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Meet the Author

Joe Pye

Joe Pye

Associate editor

Pye is the associate editor of

Credit & Debt

build credit, credit card debt, credit cards, credit score, income, millennials, save money, student loans

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