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Student loans and other debts continue to take their toll on millennials' finances, but this generation is also starting to show improvement in credit scores.
Millennial Americans—ages 24 to 39—have an average FICO® Score☉ of 668, according to Experian data. That score has grown 25 points since 2012 (as far back as our view of this generation goes), representing the biggest increase of any generation over that time period. But those in the most diverse generation in history obviously aren't all alike, and neither are their credit scores.
As part of our ongoing look at credit scores in the U.S., Experian analyzed millennials' credit in 10 large metro areas and compared them with millennials in non-metro areas of the state to see whether there was any connection between where millennials live and their credit score.
It turns out that millennials in urban areas have, on average, higher credit scores than their peers in more rural areas in the same state. In nearly all of the 10 states and metropolitan statistical areas (MSAs) we compared, the scores of urban millennials bested the scores of millennials who didn't live in a major city.
All of the following data is specific to millennials in MSAs and non-MSA (rural) areas from the second quarter (Q2) of 2019. We looked at 10 states throughout the country and compared the data on millennials who live in the state's largest MSA against those who don't live in major metro areas. Some large MSAs, notably New York City, have been excluded from this analysis due to measuring and comparison restrictions posed by the MSA's geography.
Here's a closer look at how urban and rural millennials' credit scores, average household income and average total debt compare.
| California | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Los Angeles Metropolitan* | 677 | $80,706 | $74,834 |
| Rural California | 664 | $63,870 | $69,985 |
*Los Angeles-Long Beach-Santa Ana metro area
| Texas | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Dallas Metropolitan* | 657 | $79,846 | $76,760 |
| Rural Texas | 625 | $62,139 | $58,365 |
*Dallas-Fort Worth-Arlington metro area
| Florida | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Miami Metropolitan* | 655 | $68,563 | $59,571 |
| Rural Florida | 630 | $58,340 | $52,772 |
*Miami-Fort Lauderdale-Pompano Beach metro area
| Georgia | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Atlanta Metropolitan* | 656 | $75,991 | $75,965 |
| Rural Georgia | 621 | $55,759 | $52,935 |
*Atlanta-Sandy Springs-Marietta metro area
| Arizona | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Phoenix Metropolitan* | 657 | $71,637 | $84,975 |
| Rural Arizona | 626 | $56,035 | $56,893 |
*Atlanta-Sandy Springs-Marietta metro area
| Washington | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Seattle Metropolitan* | 702 | $92,261 | $116,434 |
| Rural Washington | 676 | $64,619 | $77,065 |
*Seattle-Tacoma-Bellevue metro area
| Michigan | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Detroit Metropolitan* | 664 | $74,868 | $67,145 |
| Rural Michigan | 659 | $60,970 | $61,452 |
*Detroit-Warren-Livonia metro area
| Colorado | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Denver Metropolitan* | 689 | $83,955 | $117,801 |
| Rural Colorado | 677 | $68,731 | $85,270 |
*Denver-Aurora metro area
| Maryland | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Baltimore Metropolitan* | 674 | $91,601 | $102,396 |
| Rural Maryland | 669 | $78,626 | $95,890 |
*Baltimore-Towson metro area
| Nevada | |||
|---|---|---|---|
| Average FICO® Score | Average household income | Average total debt | |
| Las Vegas Metropolitan* | 646 | $68,071 | $73,947 |
| Rural Nevada | 655 | $76,572 | $90,680 |
*Las Vegas-Paradise metro area
Millennials in Urban Areas Have Higher Credit Scores
The correlation between urban dwellers and higher credit scores held true in almost all cities we looked at, no matter the region of the country, the economic health of the city, or the cost of living there. Even the urban areas with some of the lowest credit scores on this list (Miami-Fort Lauderdale-Pompano Beach and Atlanta-Sandy Springs-Marietta) had a higher average FICO® Score than their respective states rural areas.
Urban Millennials Make More Money and Have Higher Debt
In every one of the MSAs included in our analysis except Las Vegas, the average household income for millennials in cities was higher than the household income for their peers in non-urban areas. Millennials in cities also tended to have higher overall debt loans but, as their credit scores showed, seem to be managing that debt.
But Urban Millennials Still Don't Best the Overall Average Credit Score
While millennials in cities have higher credit scores than their peers in non-urban areas, their scores remain lower than the all-generation averages per state and nationally. Even with recent increases, millennials' average FICO® Score is 25 points lower than the average 703 score across the country.
More Research Is Needed
While our analysis shows that millennials in urban areas do have higher credit scores, it doesn't conclusively explain the reason for the disparity. The answer may lie in the lifestyle differences between urban millennials and their rural peers, which could help to explain why the two groups use credit in different ways. Those in urban areas, for example, may be more likely to rent (rather than own their home) or not to own a car, but they also tend to earn more money and have higher overall debt loads.
Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.