NEW YORK (MainStreet) -- Keith Metz-Porozni, a 31-year-old media relations professional based in Portland, Ore, had an 800 FICO credit score, which puts him in a rare, high-credit score category among Millennials.
"I really only have a middling income," Metz-Porozni says. "But I have a plan." Specifically, he measures how much cash leaves his bank account every month, "even if it's just a rough estimate," Metz-Porozni says. "If you don't know how your cash flow is affected month-to-month, you have no hope to save money or understand if you really can afford that new car or that bigger apartment," he adds.
Metz-Porozni is an anomaly among younger Americans when it comes to having good credit. The fact is, most of his contemporaries don't.
According to fresh data from Experian, U.S. Millennials have the lowest average credit scores among any nationwide demographic, at a 625 VantageScore. Generation X averages a 650 VantageScore, while Baby Boomers average a 709 VantageScore. (VantageScore, like FICO, is a firm that uses its own formula to calculate a consumer's credit score based on data from Experian, Equifax and TransUnion, the three American credit bureaus.)
That flagging of Gen Y credit is significant, as Millennials recently passed the venerable Baby Boomers (at 77 million strong) as the largest segment of the U.S. population. As Experian puts it in a statement, "this digitally independent generation is still much less savvy than older generations when it comes to their finances and credit management."
For Millennials, the recipe for success is a heavy dose of financial learning, experts say. "Given the significance Millennials play in financial services and the credit marketplace, it is crucial to understand this influential consumer segment and how they use credit as a tool," notes Michele Raneri, vice president of analytics and business development at Experian. "While this generation may not look like they are on the right track financially, it's important to keep in mind that credit scores are built on credit experiences, and while this generation has been slower to use credit, they have plenty of opportunities to build a positive credit history. The best way to do that is to understand credit before using it."
That also means starting early on a path to a healthy credit score. "You need to build a good credit score when you're young - even if you don't see yourself taking out big loans -- for a house, car, etc. -- for years," says Lee Gimpel, the co-developer of The Good Credit Game, a curriculum kit for financial educators who teach classes about credit reports, credit scores and credit cards. "That's because a good credit score is largely based on having a track record of using credit responsibly. If you have five years of good credit, it's better than five months."