Average Credit Scores by Age

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Average Credit Scores by Age

Over the last decade, credit ratings have steadily increased. However, one constant has been that older Americans have the greatest average scores, with each generation scoring higher overall than the younger one behind it. Here are the latest recent figures.

Key Takeaways

  • The average credit score in the United States has grown with each generation.
  • Although age does not directly affect credit score computation, having a longer credit history may assist boost one’s score over time.
  • Over the last decade, credit ratings have risen across all generations.

How Credit Scores Break Down by Generation

Credit scores differ widely from Generation Z to the Silent Generation. Experian forecasts that Gen Z people (18 to 23 years old) had an average score of 674 in October 2020, based on the generally used FICO 8 score, whereas the average among the oldest generation (age 75 and above) was about 85 points higher, at 758.

With a 680 average, Millennials (ages 24 to 39) do not do much better than Generation Z. From there, it’s a 19-point increase to the average Generation X score of 699 (ages 40 to 55), and then an even greater climb to the average baby boomer score of 736. (ages 56 to 74).

The age of a person is not explicitly considered while determining their credit score. However, older customers have had more opportunity to develop credit and have a solid payback track record than younger consumers.

Average FICO 8 Score by Generation
Generation20192020
Generation Z (ages 18-23)667 – Fair674- Good
Millennials (24-39)668- Fair680- Good
Generation X (40-55)688- Good699- Good
Baby boomers (56-74)731- Good736- Good
Silent generation (75+)757- Very Good758- Very Good

How Credit Scores Are Calculated

The first thing to realize about credit scores is that there are several scoring models. The FICO 8 score, however, is the most generally utilized credit score among the majority of lenders and is monitored by all three credit reporting agencies.

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FICO 8 scores may vary from 300 to 850 and are based on the five weighted elements listed below.

  1. History of payments This is the single most important aspect in your score, accounting for 35% of the total. It tracks how often you make payments late or on time.
  2. Utilization of credit. Credit usage, which accounts for 30% of your score, refers to how much of your available credit you are utilizing at any one moment. To put it another way, how much debt do you have in comparison to your available credit lines? Lower usage rates improve your score.
  3. Credit history length. This factor’s weighting is much lower at 15%. However, a credit history that spans many decades, rather than just a few years, can increase your score. This is one of the reasons why older customers have better credit ratings.
  4. Credit enquiries have increased. If you’ve applied for new credit a lot in the last two years, it might hurt your credit score. This may have an influence at 10% of your overall score, although it is significantly less relevant than the ones listed above.
  5. Credit allocation. Similarly, demonstrating your ability to handle a variety of credit types (e.g., credit cards vs installment loans such as a mortgage or vehicle loan) counts for 10% of your score.

The Bottom Line

From 2011 through 2020, the average credit score in the United States grew or remained the same in nine of ten years. However, 2020 was remarkable for seeing considerably more substantial progress, with each generation’s average score climbing. In contrast to the previous eight rises in the decade, each of which was just a couple of points, the 2020 average score for all Americans increased by eight points, from 703 to 711. The averages for Generation X and millennials, in instance, increased by 11 and 12 points, respectively.

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The increase may be traced in part to the COVID-19 epidemic. Lockdowns and travel restrictions, in particular, hampered several areas of discretionary expenditure, causing credit use rates to fall. Furthermore, government stimulus monies, paired with decreased expenditure, assisted many customers in making their card payments on time, resulting in lower delinquency rates.

Methodology

Experian is one of the three main credit reporting agencies in the United States, and their study of average scores by generation is based on aggregated data from millions of consumer credit and debt records.

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