Compared to their elders, millennials have a lot to learn about credit.
Millennials may be more tech-savvy than baby boomers and Gen Xers, but they’re not credit savvy.
Only 12 percent of millennials have a “complete understanding” of factors that impact credit, says a 2018 survey from Discover.  Older generations, on the other hand, have a 28 percent and 19 percent “complete understanding,” respectively.
Some mistakes millennials make with their credit cards include:
- Misunderstanding common credit card practices
- Enrolling in multiple credit cards before they’re ready
- Not learning financial management skills
Millennials need to learn how to build up their credit correctly now. That way they’ll get better rates on mortgages and auto loans.
Lacking the knowledge
Many millennials are not keeping up with the knowledge of cardholder rights that can save them money. Only 32 percent know they can try to reject an interest rate hike from their credit provider, student loan refinancer LendEDU found in a 2017 survey. 
“Under the Credit Card Accountability and Disclosure Act, known as the CARD Act, a credit card holder has the right to refuse to pay a higher APR set by the credit card company,” the survey says. “While chances are slim, the credit card company might agree to the older, lower interest rate.”
Some of the generation is also confused about what happens when they miss a payment on their cards. One out of four thinks their credit score won’t change if they missed a payment. And 6 percent think it will go up — which is not true.
But if you don’t pay it at all? While they won’t be able to take you to jail for not paying off your debt, it will affect your credit score negatively. Luckily, only 29 percent of millennials have missed a credit card payment and found out that was the case.
What is keeping these millennials down?
Even though millennials don’t have the greatest scores, that doesn’t mean they’re not trying to improve them.
A study from Elevate revealed that nearly as many nonprime millennials — those with a credit score under 700 — put in the same amount of effort researching finances as prime millennials. 
However, millennials with credit scores lower than 700 are twice as likely to experience stress over their finances.
Elevate’s findings suggest that nonprime millennials didn’t benefit as much from watching their parents handle their finances as prime millennials. Only 49 percent of nonprime compared to 61 percent of prime millennials say they benefited from observing their parents growing up.
Moreover, only 20 percent say they were actively taught financial management skills from their parents compared to 33 percent of prime millennials.
They were also more likely to have made mistakes from learning by trial and error.
Seventy-two percent of nonprime compared to 41 percent of prime millennials said they learned by trial and error — which could’ve resulted in more mistakes made that damaged their credit than prime millennials, who avoided those mistakes from lessons passed down by their parents.
Credit score misconceptions
While the Discover survey found that many people like to check their credit score, there is a surprising number of people who don’t think it’s a good idea.
Almost a quarter of participants, from all age groups, believe checking their credit scores can negatively affect it, the Discover survey says. Meanwhile, 16 percent aren’t sure of the repercussions. Luckily, 62 percent correctly state that checking your credit score doesn’t cause any damage to it.
Some millennials said they hadn’t checked their credit score at all in the last year. Twenty-two percent of that group said they “didn’t know how or where to check it,” Discover found.
The good news is, it’s becoming more popular to check your credit score among all generations, says a joint study from the Consumer Federation of America and VantageScore.  Whether we’re planning major purchases, like taking on a mortgage or car loan or applying for a credit card, many of us are looking to bump up our credit scores to get the best interest rates.
We tend to check it for ways to clean it up, even though having good credit doesn’t necessarily exempt us from debt.
A short-term mindset
Some millennials try to benefit from the rewards of multiple credit cards. While they may be getting some perks now, it’s not helping them out in the long run.
For those looking to build a credit history, they could use only 30 percent of their balance every month. This avoids damaging their credit score and the remaining balance is saved for any financial troubles. Instead, 36 percent have maxed out their card before, which means they’re missing out on having more spending power, the LendEDU survey found.
By opening more than one card, millennials are messing with their credit scores. A major part of a credit score besides paying bills on time is credit history, including the average age of your accounts, which would be negatively affected by several new cards. Using their accounts for longer would provide a better credit boost than a new card.
Whether you’re a millennial or not, visit our step-by-step guide on how to improve your credit score.
Kristen Grau contributed to this report.
Published by Debt.com, LLC