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If you’re in the market for a new (or new-to-you) set of wheels with plans to finance it, predicting your interest rate will help you figure out the total costs of the loan. According to recent Experian data, the average interest rate for a new car loan for someone with a 750 credit score is 6.87%. For a used car, the average interest rate is 9.36%.

In general, the higher the interest rate, the more expensive the loan. But what exactly does an interest rate mean for your wallet, and how can you get a lower score? We’ll look at the ins and outs of what factors can impact the interest rate on your auto loan and what you can do to get a better rate.

Average Used Car Interest Rate for 750 Credit Score

As we discussed above, drivers with a 750 credit score who are shopping for a used car can expect to pay an average interest rate of 9.36%.

A score of 750 is considered very good and is a sign to lenders that you’re able to successfully manage your credit. This means you could qualify for credit cards and loans and better-than-average lending terms. If your credit score isn’t where you’d like it to be, there are steps you can take to build your credit over time.

Factors That Affect Auto Loan Interest Rates

Several variables play into the interest rate on your car loan. Let’s look at the most common ones:

Credit Score

Your credit score can play a major role in determining your interest rate. Usually, the higher your credit score, the lower your interest rate. On the flip side, the lower your score, the higher your rate.

Case in point: Based on Experian data, the average interest rate for used-car borrowers with a deep subprime credit score (500 or under) is 21.55%. Meanwhile, the average interest rate for those with super prime credit (781 and above) is 7.13%.

Lender

Whether you go through a bank, credit union, online lender, or dealer, the car loan interest rate you’re offered is influenced in part by where you get your loan. Interest rates vary widely by lender.

Amount Borrowed

When you borrow a large amount of money, you’re considered a greater risk to the lender. That’s because they stand to lose more if you aren’t able to pay back the loan. In turn, a lender may decide to charge a higher interest rate on a larger loan.

Length of the Loan

Typically, the longer the loan term is, the higher the interest rate. That’s because there’s more time for your financial circumstances to shift, and you might have a harder time keeping up with your payments down the line. Conversely, shorter loan terms typically have lower interest rates.

Economic and Market Conditions

Decisions made by the Federal Reserve can influence the lending rates on car loans. The strength of the economy and larger market trends may also play into what interest rates are offered. For instance, the higher the inflation rate, the greater the chances that interest rates rise.

How to Get a Better Auto Loan Interest Rate

There are a number of measures you can take to improve your chances of getting a better auto loan insurance rate.

A good place to start is to focus on building your credit. This means staying on top of bill payments, keeping your credit usage low, and only applying for credit when necessary, among other things.

You can also spend some time improving your credit score. Regular credit score monitoring can help you find ways to boost your score.

Finally, shop around for a lender to see which one can offer you the lowest interest rate.

Recommended: What Is the Starting Credit Score?

How Often Do Auto Loan Rates Change?

Auto loan interest rates change daily and can vary based on the lender, loan amount, market conditions, and other factors. It’s a good idea to check your auto loan rate at different points of your shopping journey. Also, recheck your auto loan rate if you decide to get a new car instead of a used one or change the loan term or amount.

How to Use Average Car Interest Rates

Knowing the average car loan interest rates — and the average interest rate for a car loan with a 750 credit score, if that’s your situation — can help give you an idea of what you’ll pay for your used set of wheels.

To figure out the total cost of the car, factor in the interest rates, fees, routine maintenance and repairs, gas, and registration and title fees. You’ll also want to determine your monthly payments, which include the loan amount, interest rate, and repayment term. That way, you can gauge what’s an affordable amount to cover each month.

Where Are Auto Loan Rates Heading?

While it’s impossible to say where exactly auto loan rates will be in the coming months, they have gradually increased over the past several years. According to Experian, in Q2 of 2024, the average interest rate for new car loans was 6.84%, and 12.01% for used cars. Compare that to Q2 of 2019, when the average interest rate for new car loans was 5.70% and 9.34% for used cars.

However, you may be able to get more for your money if you’re planning to buy a car in the months ahead. The Federal Reserve is expected to lower its benchmark rate multiple times in late 2024 into 2025, which will likely impact borrowing costs for a new car.

Ways to Get a Better Car Loan Rate

Here are some ways you can help improve your odds of receiving favorable car loan rates:

Build Your Credit

Your credit score isn’t the only factor a lender considers when determining your interest rate, but it’s an important one. Generally speaking, the higher your score, the lower your interest rate will be. A good first place to start is to check your credit score to see where you stand.

Some credit card issuers, banks, credit counselors, and spending apps offer free credit scores. They’ll also alert you when your score changes and give you insights into what caused your score to go up or down.

To build up credit, stay on top of your payments, lower your credit utilization, and avoid taking out credit unless absolutely necessary. It’s not an overnight process, but putting in the effort and taking the right steps make for steady progress.

Recommended: What Affects Your Credit Score?

Work With Lenders You Know

If you have an existing loan with a lender, that longstanding relationship could help boost your odds of getting more favorable rates. Sit down with your lender and see what kind of car loan rates you might qualify for.

Shop Around

Different lenders have different lending criteria and a range of available financing. Do your homework and get quotes from several lenders for the same loan amount and repayment term. That way, you can compare your rates side by side.

Opt for a Shorter Loan Term (If Possible)

A shorter loan term poses less risk for lenders and could translate to a lower rate for you. A shorter term can also mean larger monthly payments, so play around with different loan terms to see how much you might owe on your car loan each month in different scenarios.

Save for a Larger Down Payment

Because higher loan amounts mean higher interest rates, see if you can shore up funds for a larger down payment. That can bump down the rate on your auto loan. (A money tracker app can help you set budgets and monitor spending.)

Get a Cosigner

A cosigner with strong credit may help boost your odds of landing a lower interest rate. However, should you fall behind on your payments, the cosigner is on the hook financially to pay what is due. You’ll want to have a discussion about each person’s role and responsibilities beforehand.

The Takeaway

Getting your head around the average used car loan interest rate for a 750 credit score can help you determine how much you’ll be paying on interest on a car should you get financing. In turn, it can give you a stronger handle on the total cost of the car.

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.

See exactly how your money comes and goes at a glance.

FAQ

How common is an 825 credit score?

According to Experian, 21% of consumers have a credit score between 800 and 850, which is considered exceptional.

How many people have a 900 credit score?

Nobody has a 900 credit score. That’s because standard credit scores range from 300 to 850. That said, FICO created industry-specific FICO® Score models that range between 250 and 900, but these models have very limited use.

How rare is an 800 credit score?

About a quarter of Americans (22%) have a credit score of 800 or higher, which falls within the “Excellent” range.

What is a bad APR for a car?

A bad APR on a car is typically associated with lower credit scores. For instance, the average interest rate for used-car borrowers with a credit score of 500 or under is 21.55%.

What is a good interest rate on a 72-month car loan?

According to MarketWatch, the average interest rate for new cars on a 72-month car loan is 6.86%, and 12.80% for used ones. An interest rate that falls below that is considered better than average.

Is 750 a good credit score to buy a car?

A 750 credit score is in the “Very Good” range and considered above average. With that score, you can usually qualify for more competitive interest rates, larger loan amounts, and more flexible repayment terms.

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Photo credits: iStock/Drazen Zigic

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q424-020

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Whether you’re buying a home or an investment property, it’s important to understand property ownership rights in real estate. Each type of real property has a classification of ownership that determines what can be done with that asset. A freehold estate refers to real property where the owner has full ownership rights, allowing the property to be passed down indefinitely.

In this guide, we’ll take a closer look at the definition of freehold estates and the implications for property owners.

Definition of Freehold Estate

What is a freehold estate? A freehold estate is an estate in land that has an undefined duration of ownership, while a non-freehold estate involves leased property rights with a specific termination date.

In other words, an owner of a freehold estate has exclusive and indefinite rights to the property. This means that it can be passed on to heirs or beneficiaries for any amount of time. The specifics depend on the type of freehold estate, which we’ll elaborate on below.

Types of Freehold Estates

There are three main types of freehold estates: fee simple absolute, fee simple defeasible, and life estate. Conditions for ownership and how the property may be used vary between each type.

•  Fee simple absolute: This is the most common type of freehold estate. It gives property owners complete rights to a property title in perpetuity and to use the land without restriction, as long as you pay property taxes and avoid violating any active easements and local land use regulations.

•  Fee simple defeasible: This type of freehold estate operates similarly to fee simple absolute but with more restrictions. For example, fee simple defeasible could require that a farm remain as agricultural land. If a buyer violates these conditions, even after closing, the property could legally revert back to the seller or a specified heir or third party. Keep these conditions in mind if making an offer on a home with a fee simple defeasible situation.

•  Life estate: This type of estate is a form of joint ownership that allows a grantee to receive the title to a property upon the grantor’s death, rather than going through probate. Life estates are often created by property owners who want to streamline the process of giving their home or land to a child or heir after they pass. The grantor may continue occupying their home, but selling the property or mortgage refinancing would require the grantee’s approval.

Rights Associated with Freehold Estates

A freehold estate is the highest degree of property ownership, giving the owner the right to use the land for any lawful purpose, unless otherwise restricted by an encumbrance or fee simple defeasible ownership.

With a freehold estate, the property owner has an unlimited duration of ownership. They have the right to sell their home or property, lease it to others, and pass it down to heirs.

Freehold vs. Leasehold Estates

There are non-freehold estate arrangements to become familiar with, too.

If you’ve ever rented an apartment, you’re likely familiar with the concept of a lease agreement. A leasehold estate operates on the same principles. Put simply, it refers to a tenant’s exclusive right to occupy a property for a specific period of time.

When comparing a leasehold and a freehold estate, the key difference is the duration of the occupant’s rights. Leasehold estates are temporary and dictated by the terms of the lease, while freehold estates grant an indefinite duration of ownership.

Recommended: Mortgage Calculator With Taxes

Creation and Transfer of Freehold Estates

If you own a home or property, you already are in possession of a freehold estate. How the property is transferred will depend on the type of freehold estate. One way to transfer ownership is through a life estate.

Setting up a life estate can be done through a life estate deed. This legal document is filed with your local recording office to ensure the other person, known as the remainderman, is added to the deed. Again, using a life estate helps an heir receive the property faster by avoiding probate. Creating a life estate is serious business, and it is not the only way to transfer property to avoid probate, so it’s wise to consult an estate planning expert before you sign anything.

Recommended: Mortgage Interest Deductions

Limitations on Freehold Estates

There are limitations to any type of property ownership, including freehold estates. Of note, there could be a legal claim against a property from a party other than the owner, known as an encumbrance.

There are multiple types of encumbrances, including easements, liens, and encroachment.

An easement grants land use rights or property access to a third party. For example, a utility may have an easement to run a gas line through a property, or an easement can grant access to a shared driveway. This might have an impact on how much a house is worth.

Properties may be encumbered by a lien, which gives another party the right to seize the property for nonpayment of a debt, such as home mortgage loans, property taxes, or homeowners association fees. Since the estate serves as collateral, the property can be sold if needed to recoup unpaid debts.

Encroachments can also limit the use of freehold estates. An encroachment occurs when a neighbor has built a structure that intrudes on a property, limiting its full use.

During the homebuying process, in addition to ordering a home inspection, buyers typically request a formal title search to make sure there aren’t any encumbrances or claims against the property, which could delay closing.

Freehold Estates in Different Jurisdictions

Freehold estates exist in different jurisdictions in the U.S. and abroad. In the U.S., they are dictated by state and local laws.

Local zoning outlines how a property can be used in a specific area, as well as building dimensions and characteristics. Some common types of zoning include residential, commercial, agricultural, and industrial. Residential zoning may also differentiate between single-family and multifamily properties.

Freehold Estates in Estate Planning

Freehold estates are often referred to as “estates of inheritance”, since the estate is transferred to the owner’s heirs upon death. Including freehold estates when doing estate planning can give peace of mind that loved ones will have fewer legal and financial hurdles to deal with. Otherwise, the transfer of property and other assets can get held up in probate court.

The Takeaway

Buying real estate is a major investment. Freehold estates provide owners with indefinite property rights, though there can be limitations depending on encumbrances and the type of freehold estate arrangement.

Unless you’re a real estate professional, some of these terms may go beyond your needs. However, understanding your rights as a property owner and if there are any claims against your property is essential for protecting your investment when you are buying a home or other property.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

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FAQ

How does a freehold estate differ from fee simple ownership?

Fee simple ownership is a type of interest that property owners can have in a freehold estate. Fee simple ownership lets you do as you wish with a property, barring any liens or local laws, while the other types of freehold estates carry more conditions for how a property is used and transferred.

Can a freehold estate be taken away by the government?

A freehold estate could be taken by the government through eminent domain, or when the owner dies if there aren’t any heirs or beneficiaries. Eminent domain allows governments to claim private property if it’s necessary for public use and after compensating the owner.

Are there any restrictions on selling a freehold estate?

A freehold estate can be sold or bequeathed as the owner sees fit, without conditions and restrictions. However, there may be specific restrictions for how the property is used if conditions were set by the seller. This is known as fee simple defeasible ownership.

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Photo credit: iStock/Kirpal Kooner

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This article is not intended to be legal advice. Please consult an attorney for advice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

SOHL-Q424-006

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As of the second quarter of 2024, the average car loan interest rate for a new car is 6.84%. The average interest rate for a used car is 12.01%. This is across all credit scores and loan terms.

However, the averages change quite a bit when broken down by credit score, loan term, and new vs. used car loans. Here’s what auto loan interest rates you can expect, why they vary, and what you can do to get a better interest rate for your next car loan.

Average Used Car Interest Rates by Credit Score

The average auto loan interest rates based on credit score, collected by Experian in the Q2 2024 “State of the Automotive Finance Market,” are as follows:

Credit score	New car interest rate	Used car interest rate
Super prime (781 to 850)	5.25%	7.13%
Prime (661 to 780)	6.87%	9.36%
Near prime (601 to 660)	9.83%	13.92%
Subprime (501 to 600)	13.18%	18.86%
Deep subprime (300 to 500)	15.77%	21.55%

Recommended: What Is the Starting Credit Score?

Factors That Affect Auto Loan Interest Rates

It helps to understand what factors affect auto loan interest rates. If you understand these, you may be able to make choices that can secure a lower APR on your next car.

Credit Score

Your credit score is a key factor in what interest rate you’ll qualify for on an auto loan. The better your score, the better interest rate you can get.

Lender

Lenders play a big role in auto loans, largely due to the financing incentives offered on new car loans. If you’re able to take advantage of zero or low-interest financing, that might be the way to go. Just be sure to negotiate the price of the car before you talk payments with the dealer.

Amount Borrowed

A larger down payment means you’ll borrow less and possibly qualify for a more favorable interest rate.

Length of the Loan

Shorter loans have lower interest rates for new vehicles, but that doesn’t always hold true for used car interest rates. According to Experian data for 2024, here’s the average car loan interest rate based on the length of the loan:

Term	New car interest rate	Used car interest rate
Up to 48 months	3.87%	12.05%
49 to 60 months	5.04%	10.93%
61 to 72 months	6.86%	12.80%
73 to 84 months	9.07%	11.53%
85+ months	9.22%	9.81%

Economic and Market Conditions

Economic and market conditions affect what interest rates are available. When the Federal Reserve Board raises interest rates, those costs are usually passed on to the consumer (you). You’ll see higher interest rates when this happens.

If there’s a high demand for cars, such as in the years following the COVID-19 pandemic, you may see higher rates and fewer incentives, as well.

How to Get a Better Auto Loan Interest Rate

If you’re looking for a better auto loan interest rate, there are a few strategies you’ll want to try:

•  Work on your credit score. If you have time, make some moves to build your credit score. Pay down debt, get your payments on autopay, ask for a credit line increase, dispute inaccuracies, and start regularly checking your credit.

•  Look for an incentive. If you have excellent credit, you may find a dealership that offers 0% APR financing for certain models they sell. Just be careful that you’re getting a good deal on the car, too.

•  Opt for a shorter loan term. You might see lower interest rates on shorter loan terms, such as those that are 48 months or shorter.

•  Put down a larger down payment. If you’re able to put down a larger down payment, you might see a lower interest rate.

•  Shop around for a lender. Compare auto loan interest rates for your credit score at banks, credit unions, and online lenders to see which is best for your situation.

Recommended: What Credit Score Do You Need to Buy a Car in 2024?

How Often Do Auto Loan Rates Change?

Auto loans rates change with fluctuating market conditions. If the prime rate jumps, you’ll see auto loan interest rates jump for new and used car loans.

Incentives for auto loan rates can change with little notice at the dealership, so if you see a 0% interest rate, consider snagging it before the promotion expires.

How to Use Average Car Interest Rates

Average car interest rates can help show you what to expect when you get a car loan of your own. If you don’t see a rate close to the average, you may want to continue shopping around.

Average car interest rates do change based on your credit score, loan term, car make and model, dealer incentives, and whether or not you’re buying a new or used car.

Recommended: What Should Your Average Car Payment Be?

Where Are Auto Loan Rates Heading?

Auto rates are tied to the federal funds rate. When the Federal Reserve Board votes to cut rates, you may see lower interest rates on auto loans. But there are other factors lenders consider — such as delinquencies — before lowering their rates.

Car valuation company Kelley Blue Book expects to see lower APRs on auto loans by the end of 2024. They report a 1% decrease in your auto loan APR results in a 3% decrease in your monthly payment.

Ways to Get a Better Car Loan Rate

The best way to get a better car loan rate is to learn how to build credit. There’s a stark difference between borrowers with poor credit scores and those with optimal credit scores. Here’s a comparison of the average car loan interest rate by credit score for the very lowest scores to the very highest:

	New car loan APR	Used car loan APR
Super prime (781 to 850)	5.25%	7.13%
Deep subprime (300 to 500)	15.77%	21.55%

With poor credit, you’ll most likely pay the highest interest rate available. Even worse, you may not be able to get a loan. Only 0.38% of new car loans are issued to borrowers with a deep subprime credit score. Start monitoring your credit score if you’re worried about getting approved for an auto loan.

The Takeaway

You can use the average car loan interest rate to your advantage. Knowing what it is and what your credit score is can arm you with the knowledge to negotiate for the best rate based on your credit score.

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.

See exactly how your money comes and goes at a glance with a money tracker.

FAQ

What APR will I get with a 700 credit score for a car?

A 700 credit score is considered prime and will receive some of the best APR offers. The average interest rate for someone buying a new car with a credit score in the 700 range is 6.87%, according to Experian’s “State of the Automotive Finance Market.” For a used car, the average interest rate is 9.36%.

What car loan interest rate can I get with an 800 credit score?

An 800 credit score is considered super prime and qualifies for the best APR offers. The average interest rate for someone buying a new car with a credit score in the 800 range is 5.25%. For a used car, the average APR is 7.13%.

What is a good APR for a 72 month car loan?

The average APR for a 72 month car loan is 6.86% for a new car and 12.80% for used. If you’re able to get a better APR than the average, you may consider that good.

Is 7% APR good for a car loan?

A 7.00% APR may be a good APR for a car loan, but it depends on your credit, loan term, and whether you’re buying a used or new car. If you have excellent credit and are seeking a new car loan, 7.00% is higher than the average 5.25% APR you could get. But if you’re buying a used car, 7.00% is a great rate.

What APR is too high for a car?

An APR is too high when it’s over the average APR for your credit score. The APR for people with poor credit averages 15.77% for new cars and 21.55% for used cars, so anything over those amounts would be considered high.

Can you negotiate APR on a car?

Yes, you can negotiate the APR (annual percentage rate) on a car loan. Start by researching current rates based on your credit score and prequalifying with different lenders. Dealers may match or beat offers to close the sale, so leverage competing rates to negotiate a better APR.

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Photo credit: iStock/PixelsEffect

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SORL-Q424-018

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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.

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?

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.

Recommended: How to Check Your Credit Score for Free

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.

See exactly how your money comes and goes at a glance.

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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Photo credit: iStock/Anchiy

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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The average credit score by age 60 is currently 745, which falls in the very good range. Your credit score is an important indicator of how well you use credit, and it can help you reach financial goals like securing a home loan at favorable rates.

Knowing what the average credit score by age 60 is and how yours compares can be an important step in assessing your financial status. Here, learn more about this topic and how you might build your credit score further.

What Is the Average Credit Score by Age 60?

Credit scoring bureaus don’t break down average credit scores by age. Rather, they show data based on age ranges for generations. Those around age 60 are considered the Baby Boomer generation (at the younger end) and therefore have an average credit score of 745 on the FICO® (Fair Isaac Corporation) rating system, which is the most popular one used.

What Is a Credit Score?

A credit score is based on information from your credit history that gives companies an insight into your credit behavior. This three-digit number, calculated using formulas from credit scoring bureaus like FICO and VantageScore®, predicts the likelihood you’ll pay back loans on time. This can also be thought of as your risk as a borrower.

Credit scores start at 300 and top out at 850. The ranges for FICO scores are:

Poor	300-579
Fair	580-669
Good	670-739
Very good	740-799
Excellent (or exceptional)	800+

Average Credit Score by Age

In general, someone who is 60 years or older tends to have a higher credit score than younger people. It makes sense, considering older folks have more opportunities to build and maintain their credit history.

According to Experian data from October 2023, the average FICO credit score is broken down by age as follows.

Age group	Average credit score
Gen Z (18 to 26)	680
Millenials (27 to 42)	690
Gen X (43 to 58)	709
Baby boomers (59 to 77)	745
Silent generation (78+)	760

As you see, the average score steadily increases with age. Worth noting: Your credit score is updated regularly as new payment data is added to your report.

What’s a Good Credit Score for Your Age?

There really isn’t a certain credit score that’s considered “good” for your age. Rather it’s more useful to see where you stand right now, how you compare to your peers, and see whether your current credit score can help you reach your goals. For example, if you’re looking to refinance your mortgage, you’ll want to see if your current credit score can help you qualify for a loan with favorable rates.

Another way of looking at what is a good credit score for your age is to simply look at the ranges for these scores. The good range goes from 670 to 739, which is often good enough to qualify you for loans and lines of credit. However, if you have a very good score (740 to 799) or an excellent or exceptional one (between 800 and 850), you would likely qualify for more competitive rates and terms when borrowing money. Or if you were applying for a new credit card, you’d likely be approved for one with a richer rewards program if you had a higher score.

Checking your credit score in the same way that you might monitor your bank account balance or track your spending can be a wise financial habit that helps you understand where you stand.

How Are Credit Scores Used?

Credit score is one factor lenders look at when assessing your risk as a lender. The higher your credit score, the more likely you’re responsible with credit, and pay back loans on time. It also shows lenders how you use credit, such as the types of loans you take out, and whether you rack up higher balances on credit cards. Other lenders like credit card issuers may even require minimum credit score requirements to approve you for higher credit limits or access to luxury credit cards.

Recommended: What Is the Biweekly Money Saving Challenge?

How to Build Your Credit Score

While your credit score can fluctuate over time for reasons like accidentally missing a payment, there are plenty of opportunities to positively impact your score. Consider setting up automatic payments or reminders to pay your balances, as well as keeping all your accounts current. At the very least, pay the minimum amount owed or any past-due amounts. (More about specific factors to build credit is detailed below.)

Checking your credit history report from the major credit bureaus — TransUnion®, Experian®, and Equifax® — is also useful, as well as regularly monitoring your credit score. That way, you can see what is affecting your credit score and take positive steps to build it if necessary. Reviewing your credit reports is also helpful in case there are any errors you need to dispute.

Recommended: Why Did My Credit Score Drop After a Dispute?

How Does My Age Affect My Credit Score?

Your age doesn’t directly affect your credit score because credit scoring models don’t use this as a factor. Rather, companies like FICO and VantageScore look at your credit behavior to calculate your score. As you get older, your score may go up because you may have a longer credit history (which can contribute positively to your score) and more opportunities to build credit over time. You may well have already taken out student loans, car loans, and a mortgage and handled these capably.

What Factors Affect My Credit Score?

There are five key factors that can affect your credit score.

1.   Payment history: Whether you pay your loans on time and if any have gone to collections is one of the most important factors in calculating your credit score.

2.   Credit utilization: This is the percentage of your credit limit you use on revolving accounts like credit cards. Financial experts suggest that this amount be no more than 30% (that is, using $5,000 if you have a $15,000 credit limit). A credit utilization of closer to 10% can be better still.

3.   Length of credit history: Scoring models tend to have more data when you have a longer credit history. This can be one reason why younger people tend to have lower credit scores.

4.   Credit mix: Having a mix of loans like mortgages, credit cards, and personal loans can show scoring models how you handle various kinds of credit. A combination of installment loans and lines of credit can be valuable in this regard.

5.   New accounts: If within a relatively short amount of time you open several new accounts, you could temporarily lower your score. This can make it look as if you are in need of funding and might overextend yourself.

At What Age Are Credit Scores Built the Most?

Experian data shows that the average credit score of Baby Boomers (59 to 77) is 36 points higher than the average credit score among Gen Xers (43 to 58), which represents the biggest gap, generationally speaking. This, however, may reflect external factors (such as economic conditions) rather than the financial habits of a particular peer group.

Also keep in mind that there is no set age when your credit score will be impacted the most. Behaviors such as consistent on-time payments and keeping your credit utilization low can be far more effective in helping you build your score than merely waiting for time to pass and assuming it will positively impact your score.

How to Build Credit

There are several best practices you can adopt to build credit:

•  Pay bills on time, all the time. Your payment history accounts for 35% of your credit score.

•  Become an authorized user on a credit card (if possible). If the cardholder has positive payment habits and credit usage, it can reflect well on you.

•  Consider a secured credit card or credit-builder loan. These financial products are designed for people seeking to build their credit. They can work well for those whose credit scores don’t qualify them for traditional credit cards or loans. (Learn more about these below.)

•  Get a cosigner on a loan, which can help you either qualify or qualify for better terms. Then as you manage your loan payments well, you can build your credit.

•  Limit applying for new credit to only when necessary. Each time there’s a hard credit inquiry made, it will temporarily lower your credit score, usually by several points. These can add up and negatively impact your score.

•  Keep your credit utilization low. As noted above, ideally your utilization will be below 30% of your credit limit or, better still, around 10%. A money tracker app, whether provided by your bank or a third party, can be useful in this endeavor as you watch how dollars flow in and out.

•  Have your rent or utility payments reported to the credit bureaus. There are services that can help you get these regular payments logged towards your credit score. Typically, they don’t count. You may have to pay for this service, but it can be a worthwhile move for some people.

•  Keep accounts open. The length of your credit history contributes to your credit score. So if you have, say, a credit card that you don’t use often and are thinking about closing, it could be in your best interests to keep it open and use it occasionally. Once you close it, you will shorten your credit history, which could ding your score. You will also be lowering your overall credit limit and potentially increasing your credit utilization, which can downgrade your score as well.

Credit Score Tips

Secured credit cards and credit builder loans can be good ways to build your credit, including in situations in which you have had negative marks on your report. These options can be especially valuable if it’s not possible to get a cosigner on a loan or become an authorized user on someone else’s credit card account.

•  With secured credit cards, you put down a refundable security deposit that serves as your credit limit. If you meet certain criteria like paying on time for a specified time period, you may be able to upgrade to an unsecured credit card.

•  Credit-builder loans are personal loans where you do not receive funds upfront. Rather, you pay the lender monthly installments, which they deposit in a separate savings or certificate of deposit (CD) account. Once the loan amount is paid off, you’ll get the funds. Fees and interest rates can vary on these loans.

The Takeaway

The average credit score by age 60 is currently 745, which falls into the very good credit score range. Understanding the average credit score at age 60 can be useful as a general metric, but it’s far better to find out what yours is and, if needed, find ways in which you can build yours. Regularly monitoring your credit score can be a wise move, as can taking steps like ensuring you pay bills on time, all the time, and don’t shorten your credit history as time passes.

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.

See exactly how your money comes and goes at a glance.

FAQ

What is the average credit score for seniors?

The average credit score for the Baby Boomer generation (born between 1946 and 1964) is 745, whereas it’s 760 for the Silent Generation (born between 1928 and 1945).

How rare is an 820 credit score?

An 820 credit score falls into the excellent or exceptional range for a FICO credit score. According to recent data, around 22% of U.S. consumers have a credit score in that range.

How rare is an 800 credit score?

An 800 credit score just nudges into the excellent or exceptional range. Around 22% of U.S. consumers have a FICO credit score that’s in the range of 800 to 850, which is the highest possible range.

How rare is an 825 credit score?

It’s somewhat rare for someone to have a credit score in the 825 range. In the U.S., 22% of consumers (or just over one in five) have FICO credit scores in the excellent or exceptional range, which runs from 800- to 850.

What credit score do most Americans have?

The average credit score on the FICO scale is currently 717, which qualifies as good. In terms of credit score ranges, the category with the largest percentage, with around 28% of Americans, is the very good credit score group, which runs 740-799. Different mathematical functions are responsible for this variation.

What is the average credit score to buy a house?

It’s difficult to pinpoint the average credit score needed to buy a house, because the figure will depend on the type of mortgage you want. For example, lenders typically look for at last a 620 credit score for conventional mortgages, whereas government-backed ones like FHA loans have credit score requirements as low as 500.

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Photo credit: iStock/Miljan Živković
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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