Your credit score helps determine everything from the interest rate on your mortgage to the credit cards you have in your wallet. And in many cases — especially for large, life-changing purchases — you can be denied based on your score.

According to the latest survey from Bankrate, 58 percent of millennials report being denied at least one financial product, such as credit cards and loans, because of their credit score. That’s higher than rates of denial from both Generation X (53 percent) and baby boomers (27 percent).

This may, at least partially, be due to legislation enacted earlier in the decade.

“An unintended consequence of the CARD Act, which went into effect in 2010, is that it has become much harder for people in their early and mid-twenties to obtain credit,” says Ted Rossman, industry analyst at Bankrate. “Establishing credit is a lot like getting started in your career. Everyone wants you to have experience, but it’s hard to get that first experience.”

Millennials encounter higher rates of denial (for at least one financial product) compared to older generations.

Considering millennials have had less time to build their credit history (length of credit history makes up 15 percent of your overall credit score), this isn’t surprising. Having little to no credit can greatly impact both your score and the products and services you are able to obtain.

“An unintended consequence of the CARD Act, which went into effect in 2010, is that it has become much harder for people in their early and mid-twenties to obtain credit,” says Ted Rossman, industry analyst at Bankrate. “Establishing credit is a lot like getting started in your career. Everyone wants you to have experience, but it’s hard to get that first experience.”

Breaking it down: Who is affected by credit denials

Millennials encounter higher rates of denial (for at least one financial product) compared to older generations.

Considering millennials have had less time to build their credit history (length of credit history makes up 15 percent of your overall credit score), this isn’t surprising. Having little to no credit can greatly impact both your score and the products and services you are able to obtain.

“It’s a catch-22 in that you often need credit to build credit,” says Rossman. “A big thing holding a lot of millennials back is that they’re debt-averse — because they have student loans, because they’re scarred by the Great Recession and/or the dot-com bust and because they’re stressed by early-career salaries that aren’t keeping pace with the cost of living (especially in major cities),” says Rossman.

In addition to age-related differences, Americans with lower incomes experience higher rates of credit denial compared to their wealthier counterparts.

Thirty-six percent of Americans with annual household incomes under $40,000 report being denied a credit card compared with 22 percent of Americans making $80,000 or more.

Products and services Americans are being denied

According to the survey, credit cards (28 percent) and car loans (13 percent) are the financial products more frequently denied based on credit score. 

Among millennials, these statistics rise to 36 percent for credit cards and 18 percent for car loans.

Strategies for dealing with credit denial

“First things first, you want to ask the creditor to explain why you were denied,” says Darren Straniero, financial planner for OnPlane Financial Advisors. “From there, you can ask questions or see if you can provide additional information that may improve your ability to obtain credit with that product/service provider.”

If you do experience credit denial, chances are your credit score had something to do it. That’s why it’s crucial to have a firm understanding of your score before requesting or applying for any financial product and service.

According to the survey, millennials are less confident than older generations that they know their credit score. Just 43 percent of millennials are very confident they know their credit score compared to 48 percent of Gen Xers and 58 percent of baby boomers.

Get to know your credit score

To develop a better understanding of your score, make use of free credit reporting tools.

According to the Fair Credit Reporting Act, you’re able to request one free credit report per year from Experian, Equifax and TransUnion.

Continue to monitor your score throughout the year. Many credit cards offer free credit score tools that you can view online or via your card’s mobile app.

For example, certain Bank of America cards, such as the Bank of America® Cash Rewards credit card, offer monthly FICO® Score reporting. You can view your score (including which factors impact it), compare it to previous months and view national credit score averages.

Improving your score

“For people looking to build their credit, I recommend secured credit cards, innovative credit card companies such as Petal and alternative credit scoring systems like Experian Boost and UltraFICO,” says Rossman.

UltraFICO and Experian Boost, in particular, can help you benefit from responsible financial behaviors usually left out of traditional credit scoring, such as paying cell phone bills on time. These programs essentially boost your credit profile with additional payment history or banking data.

If you fall within the 24.4 percent of millennials who reported having fair or poor credit scores, according to a 2018 Bankrate survey, there are a few ways you can work to improve it:

  • Ensure that you’re making all of your payments on time, including rent, car payments, student loans and credit card bills. Set up automatic payments to stay on track.
  • Be aware of your credit utilization ratio, or the amount of credit available to you that you’re using. You should keep your utilization under 30 percent (under some models, it should be closer to 10 percent).
  • If you have a thin credit profile, consider a starter credit card or credit boosting programs such as UltraFICO or Experian Boost.
  • Continue monitoring your score and make use of credit-boosting programs.

The bottom line

Credit denial can be frustrating, embarrassing and even unexpected. Of Americans who have experienced credit denial, 35 percent felt embarrassed, 30 percent sad, 24 percent angry and 24 percent surprised.

Having a strong understanding of your score, working to improve it and continuing to monitor it in the future can help prevent credit denial from happening to you (or ever happening again).

Methodology

Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,498 adults, including 2,106 who shared their experiences with financial service/product denials. Fieldwork was undertaken on July 24-26, 2019. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

This story was originally published on BankrateCreate an account on Bankrate today to get your free credit report along with expert advice to improve your score. Plus, set your financial goals to personalize your dashboard with resources to help you reach them.