Despite a difficult year, millennials and Gen Z feel in control of their credit

Studies show that the pandemic hit millennials and Gen Z especially hard, but they still managed to improve their scores in 2020


Whether your credit suffered or bloomed in the pandemic, here are a few ways you can help it grow in 2021.

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I think we can all agree that we won’t easily forget 2020.

This is especially true for young people. We millennials have already seen our fair share of economic crises. This, coupled with student debt burden on top of an ever-rising cost of living, doesn’t exactly inspire spending money – and doesn’t help save it either.

And then 2020 hit, and we felt like that meme where a dog sits with his cup of coffee in a house that’s bursting in flames and says, “This is fine.”

The pandemic hasn’t been easy on Gen Z either. Those who graduated in 2020 had to face tough competition for limited job openings. Others with entry-level jobs found themselves out of work.

In fact, according to the Urban Institute Coronavirus Tracking Survey conducted in September, 19.5% of Gen Z adults and young millennials (ages 18-26) experienced layoffs. Older millennials (between 27 and 38 years old) were hit as well, with 13.1% reporting employment losses due to the pandemic.

Yet we persevered. Despite all the chaos 2020 put young people through, millennials and Gen Z found a way to take control of their financial well-being – by taking care of their credit.

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Millennials and Gen Z improved their credit during the pandemic

A Discover survey from November found that 63% of Gen Z and 64% of millennials are feeling that they’re in control of their credit scores. That’s the spirit! With all the havoc the coronavirus has wreaked, young people still managed their credit well – and were rewarded for that.

According to the same survey, 56% of Gen Z and 63% of millennials who stay on top of their credit score said it had improved in 2020.

Young Americans aren’t stopping there. While many reported improved credit scores, less than half of the survey respondents were satisfied with their scores (43% of Gen Z and 46% of millennials). If you ask me, that’s not necessarily bad news – this just shows young people worked hard on their credit and saw the fruits of their labor, so now they’re motivated to do even better.

Indeed, according to Discover, 77% of Gen Z and 82% of millennials are actively trying to improve their credit score – which makes me do a happy dance!

Unfortunately, 2020 didn’t spare some young Americans’ scores: 36% of millennials and 29% of Gen Z reported that the pandemic negatively impacted their credit.

Whether your credit score has improved or gone down, I want to equip you with some tips to stay in control of your credit in 2021. Things might not get back to “normal” right away, but it doesn’t mean your credit score should suffer.

Improving your credit in 2021

Whether or not the pandemic has affected your financial well-being, you can find ways to protect and improve your credit in the new year. Just be mindful about what you’re choosing to do.

Here are my suggestions:

  1. Avoid getting into credit card debt. When you keep charging your credit card and get too close to your credit limit, your credit utilization goes up, negatively impacting your score. Plus, it might send your future lenders a message that you’re financially struggling, which makes you a risky borrower in their eyes.
  2. Ask lenders for help when needed. If you are struggling, there’s no harm in asking for help. Call your lenders and see if they can offer deferred payments or other options to assist you during a challenging time. Many credit card issuers have stepped up to offer cardholders relief amid the pandemic. Instead of skipping payments and damaging your credit for years to come, be open with your lenders and work with them to keep your accounts current.
  3. Keep tracking your credit. Keeping your finger on your credit’s pulse allows you to track your progress – and monitor for potential fraud. You can pull your credit report for free at on a weekly basis through April 2021. If you see something on your credit file that doesn’t belong there, it may be a sign of identity theft. The sooner you get on that, the better.
  4. Put your stimulus payment to work. If you’ve received a stimulus check but don’t need to use it for essentials like rent or food, don’t rush to spend it. Use it to help your credit by paying down credit card debt if you have any. Believe me, it’s the kind of debt you want gone as soon as possible to avoid damage to your budget and your scores. If you don’t have credit card debt to worry about, that’s amazing, but don’t rush to spend your check shopping online just yet. Put it in savings. In times like this, it’s critical to have a nice fat emergency fund to keep you covered if anything happens to your main source of income.
  5. Proceed with caution. Improving your credit requires having some credit activity for credit bureaus to track. If you already have plenty of accounts, keep paying them down (and talking to your lenders when you can’t). Only take on new cards and loans when your emergency fund is doing great and you’re feeling financially safe. If you’re new to credit, this may seem a bit more challenging, but not impossible. I’d suggest getting a starter credit card (but treat it as debit, only charging what you can immediately pay off) and signing up for Experian Boost to get your phone, utility and streaming payments to work for your credit. Be patient and tread carefully. Let’s go crazy building credit later when we’re all out of the woods.

See related: Best credit monitoring services

Bottom line

While 2020 was rough, it didn’t drag down our credit. More than half of Gen Z and millennials improved their scores last year, and they’re not stopping there. Be mindful of the steps you take when building your credit in 2021, but keep doing it, and one day you’ll get those scores to 850.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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