The general trend is that the older you are, the better your credit score. The average credit score for Gen Z is 680; that rises to 745 for Baby Boomers. This is largely because Boomers have had more time to build a credit history. Your credit history shows how well you manage your debt over time and how much of a risk you are to a lender.
You can improve your credit score by paying bills on time, not using more than 30% of the credit available to you, and using a variety of loans responsibly.
Here’s an in-depth look at credit scores by age and how you can maximize your score regardless of age.
Key Points
• Credit scores generally increase with age, as older individuals have longer credit histories and more established financial behaviors.
• People in their early 20s often have scores in the “fair” range due to shorter credit histories and limited credit activity.
• By middle age, many people reach “good” to “very good” scores, as they’ve built solid credit practices, like timely payments and reduced debt.
• By retirement age, scores can stabilize at high levels if individuals maintain positive credit habits, such as low credit utilization and consistent payments.
• Key life events, like homeownership, marriage, and loan payoffs, affect credit scores over time, creating variations across age groups.
What Is a Credit Score?
Your credit score is a measure of how well you manage your debt. Lenders can access your credit score from the three main credit reporting agencies: Equifax, Experian, and TransUnion. The scores you receive from each bureau vary because each bureau may have different information about your credit.
Your credit reports, on which your scores are based, show information such as loan-paying history and the status of your credit accounts.
When you apply for a loan or financing, lenders use your credit score to establish how risky you are as a borrower. The riskier you are, the lower your score, and the more interest you may pay for a loan.
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Average Credit Score by Age
Here’s the average credit score by age and generation as of the second quarter of 2023, according to Experian.
| Generation | Age | 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+ | 761 |
How Does My Age Affect My Credit Score?
While age doesn’t have a direct effect on your credit score, older generations tend to have higher scores because they’ve had more time to establish a solid credit history. Factors that affect your credit score include your payment history, your credit utilization, the length of your credit history, your credit mix, and how often you’ve recently opened a new line of credit.
However, according to OpenLending and TransUnion’s “Financing the Future” report, Generation Z and millennials are more likely to move up to higher credit tiers at a faster rate than older generations because of their borrowing habits.
What Factors Affect My Credit Score?
There are five main factors that make up your FICO® credit score, each with varying weights. The five factors include:
Payment History
Your payment history makes up 35% of your FICO score. It includes how promptly you pay your credit card bills, your mortgage, and any installment loans. A few late payments on credit cards or a mortgage won’t ruin your score, but any bankruptcies or collections may.
Credit Utilization
Your credit utilization makes up 30% of your FICO score. It measures the amount of revolving credit you use versus the total amount of credit you have available (credit card limits, lines of credit, etc.).
Length of Your Credit History
The length of your credit history accounts for 15% of your FICO score. The longer your credit history, the better, assuming you manage your credit well. Your credit history includes how long your credit accounts have been open, the age of your oldest account, the age of your newest account, and the average age of all your accounts.
Credit Mix
Your credit mix, or the diversity of your debt, accounts for 10% of your FICO score. This includes credit cards, mortgages, HELOCs, installment loans, student loans, and car loans. If you are successfully managing a variety of financing types, it will be reflected in your FICO score.
New Credit Applications
When you apply for a new credit card, the lender will do a hard inquiry on your credit that could cause your score to dip slightly. New accounts also reduce the average age of your accounts, which could lower your score, as well. On the flipside, a new credit card account increases the amount of credit available to you, which might lower your credit utilization rate. It might also diversify your credit mix, and if you make payments on time, it could help build your credit score.
Recommended: How Long Does It Take to Build Credit?
Average FICO Score by State
The state with the highest average credit score is Minnesota at 742, and the state with the lowest average score is Mississippi at 680, according to Experian. Average credit scores are typically influenced by demographics, unemployment rates, poverty levels, education, and income.
| State | Average Credit Score |
|---|---|
| Alabama | 692 |
| Alaska | 722 |
| Arizona | 713 |
| Arkansas | 696 |
| California | 722 |
| Colorado | 731 |
| Connecticut | 726 |
| Delaware | 715 |
| District of Columbia | 715 |
| Florida | 708 |
| Georgia | 695 |
| Hawaii | 732 |
| Idaho | 729 |
| Illinois | 720 |
| Indiana | 713 |
| Iowa | 730 |
| Kansas | 723 |
| Kentucky | 705 |
| Louisiana | 690 |
| Maine | 731 |
| Maryland | 716 |
| Massachusetts | 732 |
| Michigan | 719 |
| Minnesota | 742 |
| Mississippi | 680 |
| Missouri | 714 |
| Montana | 732 |
| Nebraska | 731 |
| Nevada | 702 |
| New Hampshire | 736 |
| New Jersey | 725 |
| New Mexico | 702 |
| New York | 721 |
| North Carolina | 709 |
| North Dakota | 733 |
| Ohio | 716 |
| Oklahoma | 696 |
| Oregon | 732 |
| Pennsylvania | 723 |
| Rhode Island | 722 |
| South Carolina | 699 |
| South Dakota | 734 |
| Tennessee | 705 |
| Texas | 695 |
| Utah | 731 |
| Vermont | 737 |
| Virginia | 722 |
| Washington | 735 |
| West Virginia | 703 |
| Wisconsin | 737 |
| Wyoming | 724 |
FICO Vs. VantageScore
FICO and VantageScore are the two leading companies in the credit score industry. Both use slightly different criteria in their scoring models to determine your credit score.
The VantageScore models and the base FICO models are generic credit scores created for use by a wide range of creditors, such as private student loan companies, online lenders, and credit card issuers.
FICO also creates industry-specific auto and bankcard scores, which are built on the same criteria as the base FICO scores, but tailored for auto lenders and card issuers.
Both VantageScore and FICO update their scoring models regularly to keep up with technology and industry changes, but also to ensure they remain predictive as consumer behavior changes.
With all credit scores, the lower your score, the more risk you pose to lenders. That’s why borrowers with the highest credit score get the best loan terms.
Both the base FICO scores and the base VantageScores range from 300 to 850, while FICO’s industry-specific scores range from 250 to 900.
What Is a Good Credit Score?
According to Experian, 670 to 739 is considered good. Credit scores above 740 are very good and above 800 are excellent.
Here is how credit scores are categorized:
• Poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very Good: 740 to 799
• Exceptional: 800 to 850
Average Credit Score by Income
Your income is not considered as part of your credit score. However, some studies, including a 2018 Federal Reserve study, found that your income may have a “moderate correlation” to your credit score.
|
Average Credit Score by Income (according to the latest data from American Express) |
|
|---|---|
| Annual Income | Average Credit Score |
| Low Income | 658 |
| Moderate Income | 692 |
| Middle Income | 735 |
| High Income | 774 |
The reason your income might affect your credit score is that the higher your income, the likelier you will be able to pay your debts on time and build a strong payment history. For example, if you earn $120,000, it will be easier to pay back a debt of $10,000 than if you earn $50,000.
Nevertheless, you don’t have to be a high-income earner to build credit over time. Paying bills and debt payments on time is the most important thing.
Tips for Building Your Credit Score
• Make on-time payments: Consistently paying bills on time is one of the most effective ways to build and maintain a strong credit score.
• Keep credit utilization low: Aim to use no more than 30% of your available credit to show responsible credit management.
• Limit new credit applications: Avoid frequent credit applications, as each inquiry can temporarily lower your score and indicate potential financial strain.
• Pay down debt: Reducing outstanding balances on existing debts can improve credit utilization and positively impact your score.
• Maintain old credit accounts: Keeping older accounts open contributes to a longer credit history, which is favorable for your score.
• Review credit reports regularly: Check your credit report for errors and dispute any inaccuracies that could be lowering your score.
• Use a mix of credit types: A blend of credit types, like installment loans and credit cards, shows you can manage different forms of credit.
Practicing good fiscal management will keep your credit score from dropping and slowly help to build your credit score over time.
The Takeaway
The general trend is that the older you are, the better your credit score. That’s because older individuals have had more time to demonstrate that they can use debt responsibly. With a higher credit score, lenders consider you less of a risk and may charge you a lower interest rate on a loan.
You can build your credit score by paying bills on time, not using more than 30% of the credit available to you, and using a variety of loans responsibly. Also, don’t apply for new loans too often, as this can lower your 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.
FAQ
How rare is an 800 credit score?
According to Experian, nearly a quarter (22%) of Americans have a FICO Score of 800 or higher, which the credit scoring company describes as exceptional.
What is the average American’s credit score?
The average credit score in the U.S. was 715 in 2023, increasing by one point from its 714 average in the third quarter (Q3) of 2022, according to Experian.
Is 750 a good credit score for a 25 year old?
Yes, a 750 credit score is excellent for a 25-year-old, showing responsible credit management at an early age. With this score, you’re likely to receive favorable terms on loans and credit products, setting a strong foundation for future financial goals.
What is a good credit score to buy a house?
While credit score requirements vary based on loan type, lenders generally require a credit score of at least 620 to buy a house with a conventional mortgage.
What is a good FICO score to buy a car?
You will likely need a credit score of 661 or above to get an auto loan at a good interest rate. If you have poorer credit, you can still get a loan, but you will probably have to pay more for it or find a cosigner.
Photo credit: iStock/Jacob Wackerhausen
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