The nation’s average credit score rose a bit in the past year, from 669 to 673, according to Experian’s annual “State of Credit” study. Diving deeper into the credit reporting agency’s data reveals that age and life stage can make a big difference in the credit score you’re likely to have.
The average credit score, broken down by generation:
- The “Silent Generation,” people around age 70 and older, had the highest average score: 730.
- Baby boomers, those about ages 50 to 69, had the second highest average, at 700.
- Gen X (ages about 35 to 49) scored an average of 655.
- Gen Y (21 to 34) and Gen Z (20 and younger) clocked in at averages of 634 and 631, respectively.
Experian’s report, based on a statistical sample of its consumer credit database, reflects VantageScores, the main rival to FICO. Both credit scoring systems use information in consumers’ credit reports to estimate creditworthiness, usually expressing it on a scale from 300 to 850.
Every lender sets its own standards, but most consider scores above 720 excellent, which is good news for the Silent Generation. Baby boomers are solidly in the “good credit” range of 690-719. The younger generations fall in the “average” or “fair” band, which runs from 630-689 — but Gen Y and Z are uncomfortably close to the “poor” range, which includes scores below 630.
Curious about your score and how it compares to the averages? You can check your VantageScore and see free credit report information with NerdWallet.
Why are scores lower for younger age groups?
Experian also considered the amount of available credit used by each age group — called the credit utilization ratio — and the number of missed payments — or delinquencies — each had racked up. Those two factors have the biggest influence on credit scores.
Younger consumers had the highest utilization rates: Members of Generation X used an average of 37% of their available credit, and Generations Y and Z used an average of 36%. Boomers used about 29%. The Silent Generation’s much lower 16% utilization brought the national average rate down to about 30%.
Younger consumers, who are in the early part of their careers, are more likely to have lower salaries and thus lower credit limits. They might also have less discretionary income because of student loan debt. And those new to credit might not yet be aware that using more than 30% of their approved limits can hurt their scores.
As far as delinquent payments go, Generations X and Y were twice as likely as the Silent Generation to have an account 90 or more days overdue (40% vs. 16%). Delinquent payments stay on a credit report for seven years, so that could account for a good chunk of the difference in younger generations’ scores and those of the Silent Generation.
How can you build your credit?
The good news is that once you identify the factors holding your credit score down, you know where to focus your efforts. Making on-time payments and reducing your credit utilization could add some points if you’re hoping to build credit.
Experian said it will offer 45,000 free credit education sessions to nonprofits in some of the cities where it saw the lowest scores. If that’s not available in your area, you can find help managing credit or debt through a nonprofit credit counseling center.