That’s the warning from comparison site Finder, which found Millennials have the lowest credit scores of any Australians. It’s a worry because over the next few years many Millennials will be thinking about buying a first home, and a decent credit score can be a powerful asset when it comes to getting the thumbs up from a lender.

Credit scores are based on our credit history – a record of how well we’ve managed debt and paid bills, maintained by credit reference agencies like illion and Experian. Scores typically range from 0 to 1000 – the higher the score, the less risk you represent to lenders. As a guide, a credit score between 700 and 799 is regarded as very good, over 800 is classed as excellent.

Finder analysed over 14,000 credit reports, and found that Millennials have the worst credit score of any generation, with an average score of 666 – below the average of 685 across all generations.

Baby Boomers scored the highest with an average rating of 759. Gen Xers came in second with an average score of 689.

A low credit score is not something to wave aside – especially at a young age. It can make it difficult to secure a car loan, home loan or a personal loan for a wedding.

The thing is, six out of 10 Australians don’t keep tabs on their credit score. But lenders know your score, so why shouldn't you? It’s easy – and free – to find out through sites like Credit Savvy or Finder.

If it turns out your score is on the lean side, get in touch with credit reference agencies to grab hold of a copy of your credit record (it costs nothing), and check that the details are accurate.

To improve your score, get into the habit of paying bills on time, and apply for new credit sparingly. Making multiple credit applications in a short period of time can suggest to lenders that you are under financial stress.

Credit scores can also be impacted by how much available credit you have. If your credit card limit is high, think about getting in touch with the card issuer to have it lowered.

All these steps are good for your credit score, but it won’t change overnight. Nurture your credit score now, and you’re in a much better position to negotiate competitive terms when you’re in the market for a loan.

Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.