Having good credit can help you reach financial goals such as buying a car or home, or renting an apartment. If you’re in your 20s, it makes sense that your credit score may be lower than that of older friends. That’s because you have a shorter credit history, an important factor in calculating your score.
Still, you can use averages to gauge where you stand credit-wise. Credit bureaus don’t use your age to calculate your score, though there are patterns based on it. Let’s take a look at the average credit score for a 25 year old and see what it could mean for your financial life.
Key Points
• The average credit score for a 25 year old is 680, which falls in the low end of the “good” range.
• Many 25 year olds carry student loans, which can influence their score positively with on-time payments or negatively if payments are missed.
• A shorter credit history contributes to a lower average score, as credit bureaus weigh the length of credit history heavily.
• Younger adults may rely more on credit, increasing utilization rates, which can temporarily lower scores.
• By making consistent payments and maintaining low balances, young adults can steadily increase their credit scores over time.
Average Credit Score for a 25 Year Old
While data doesn’t explicitly show the average credit score breakdowns by age, it does by age ranges. Those who are 25 fall under what are considered Gen Z, and this generation’s average FICO® credit score was 680 in 2023.
Recommended: What Is the Starting Credit Score?
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What Is a Credit Score?
A credit score is a three-digit number, typically ranging from 300 to 850, that predicts your credit behavior. It shows lenders how likely you are to pay back loans on time.
Credit scoring companies like FICO and VantageScore calculate your credit score based on information from your credit history, using factors like payment history, how long you’ve had credit or accounts open, and new credit applications. The higher your score, the less of a risk you are to lenders, as it demonstrates you pay back loans on time.
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What Is the Average Credit Score?
As of October 2023, the average FICO credit score for all ages was 717. The average VantageScore for all ages was 702 as of March 2024.
Average Credit Score by Age
The average credit score tends to go up the older someone is, which could be attributed to a longer credit history and opportunities to open different types of accounts. The table below shows average FICO credit scores according to Experian data from October 2023.
| Age | Average Credit Score |
|---|---|
| 16 to 26 | 680 |
| 27 to 42 | 690 |
| 43 to 58 | 709 |
| 59 to 77 | 745 |
| 78+ | 761 |
What’s a Good Credit Score for Your Age?
Even if your credit score is at or above the average for your age range, it doesn’t mean that it’s good or that it’ll help you reach your financial goals. A better way to gauge your credit is by using credit score ranges from FICO and VantageScore. That way, you can understand the likelihood of qualifying for credit cards and other types of loans.
FICO
| Rating | Credit Score Range |
|---|---|
| Poor | Lower than 580 |
| Fair | 580 to 669 |
| Good | 670 to 739 |
| Very Good | 740 to 799 |
| Exceptional | 800 and higher |
VantageScore
| Rating | Credit Score Range |
|---|---|
| Subprime | 300 to 600 |
| Near Prime | 601 to 660 |
| Prime | 661 to 780 |
| Superprime | 780 to 850 |
How Are Credit Scores Used?
Lenders use credit scores as a factor in determining whether to approve you for a loan. Your credit score provides a snapshot of your risk as a borrower and how you use credit. In many cases, the higher your credit score, the more likely you’ll be approved for loans at more competitive rates and terms. Or, you may have access to more loan products, like luxury rewards credit cards.
Factors Influencing the Average Credit Score
There are five factors that affect credit scores:
• Payment history: This aspect of your credit score looks at whether you pay your loans on time, including accounts that may have gone to collections.
• Length of credit history: Having a longer credit history can offer more insights into your credit behavior.
• Credit utilization: Credit utilization is the percentage of available credit you use on revolving accounts. The more you use, the more it could seem you’re overextended on your accounts.
• Credit mix: Scoring models look at the varieties of credit you have like mortgages, credit cards, and car loans.
• New credit: Opening or applying for new credit accounts within a short span of time could affect your credit score.
How to Strengthen Your Credit Score
Credit scores can fluctuate over time due to a number of reasons. If your credit score is lower than you’d like, consider these best practices to build credit:
• Set up automatic payments or reminders to help you pay loans on or before the due date
• Keep your accounts current by paying off past due balances
• Check your credit history reports to see what may have led to a drop in your score
• Fix any errors on your credit reports
• Increase your credit card limits
• Avoid applying for new credit unless necessary
• Keep accounts as long as possible, even if they’re not currently being used
• Watch your credit card balances to make sure they don’t get too high
How Does My Age Affect My Credit Score?
Your age doesn’t directly affect your credit score. Instead, it’s based on factors like your payment history and the length of time you’ve had credit. The earlier you start building your credit, the more opportunities you’ll have to get a good credit score.
Recommended: How Long Does It Take to Build Credit?
At What Age Does Credit Score Improve the Most?
There’s no set age when your credit score will improve the most because it’ll depend on factors such as when you start building credit and whether you pay loans consistently on time. Older generations may have higher credit scores because they have more chances to build their credit. It’s important to focus on where you are at now and what you can do to keep building your credit.
Credit Score Tips
Aside from paying your bills on time, consider other ways you can build credit. While it may be hard to open a new loan or credit card if you have a limited credit history, you can consider products like a secured credit card. A secured credit card has a refundable security deposit that acts as your credit line. Another option is a credit builder loan, where the lender sets aside your loan funds in a separate savings account and you can access the cash once you’ve paid off the loan.
The Takeaway
While looking at the average credit score for a 25 year old may be useful to see where you stand, it’s more effective to look at your credit history to see what you can do to build your score. By regularly monitoring your score, you can see whether the actions you’re taking are helpful.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
FAQ
Can I buy a house with a 633 credit score?
Yes, it’s possible to qualify for a mortgage with a 633 credit score. You may be able to qualify for an FHA loan or a conventional mortgage, but potentially at a higher interest rate.
Can I buy a house with a 613 credit score?
Yes, it’s possible to buy a house with a 613 credit score, though it may limit your loan options and result in higher interest rates. FHA loans, designed for those with lower credit scores, are often a good option, but lenders may require a larger down payment.
What credit score is needed to buy a $300K house?
The credit score you need to buy a $300K house will depend on the type of mortgage you want and other factors, such as your income, available assets, and down payment.
Is 650 a good credit score?
A 650 credit score is considered fair and is slightly below the average credit score.
Is a 750 credit score good at 25?
Yes, a 750 credit score at 25 is considered excellent and indicates strong credit habits for someone in this age group. This high score can help secure favorable interest rates and better loan terms, giving an advantage in achieving financial goals.
How rare is an 800 credit score?
Less than a quarter of U.S. consumers (22%) have a credit score of at least 800. This exceptional score reflects consistent financial responsibility, including on-time payments, low credit utilization, and a long credit history.
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