Millennials in Illinois are more confident about their financial literacy than 18- to 34-year-olds in the rest of the country—but they’re also hanging on to some dangerous myths about credit, according to a new study from BMO Harris Bank.
The report examined attitudes and habits concerning credit scores, the numerical ratings calculated by credit bureaus as a way to measure borrowers’ financial responsibility.
First, the good news. About eight in 10 Illinois millennials say they know how to manage their money in order to improve their credit scores, compared to just 72 percent on the national level. More than half of millennials in the state report checking their credit score every year. When asked to identify a good credit score, millennials nationwide said it should be 625; Illinois millennials had higher standards, saying on average that a good score would be 654.
“Our survey shows that most feel they are knowledgeable about credit, although their idea of a good score is slightly below what it should be,” stated Julie Curran, Chicago-area regional president at BMO Harris, in a news release. Curran said BMO considers a good credit score to be “in the 680-720 range.”
However, Illinois millennials - more than other age groups in the state - said they think checking a credit score would impact that score negatively: Nearly 40 percent believed that misconception, compared to 29 percent of respondents aged 35-54 and 17 percent of those 55 or older.
Younger Illinoisans also were slightly more likely than other age groups in the state to believe that paying cash for everything will improve a credit score or a bad credit score will stay with a person indefinitely.