FICO credit scores play a key role in determining creditworthiness. The overall average FICO credit score in the US is 714, according to 2022 data from Experian.
But the average credit score by age shows something very different. Why is this important?
As you progress through life and encounter major financial decisions, your credit score becomes increasingly significant. Whether you’re purchasing a home, financing a car, or seeking credit for for a student loan or unexpected expenses, having a good credit score is crucial at any age is crucial.
Average Credit Score By Age
FICO scores are one of the most commonly used types of credit scores, and they are based on the information in your credit report. The range of FICO credit scores is between 300 and 850.
Here is the average credit score by age according to Experian.
| Generation and Age | Year (2022) |
|---|---|
| Generation Z (18-23) | 679 |
| Millennials (24-39) | 687 |
| Generation X (40-55) | 706 |
| Baby Boomers (56-74) | 742 |
| Silent generation (75 and up) | 760 |
How to Improve Your Credit Score
Good credit scores can help you achieve financial goals and provide you with more opportunities in various aspects of your life.
The first step in improving your credit score is to know what factors matter most. The factors that carry the most weight are:
- Payment history: 35%
- Amounts owed: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 10%
Here are some actions that can help improve your FICO Score:
Pay all of your bills on time. Making timely payments on all your accounts can help you maintain a good credit score and show lenders you are responsible with credit. However, if you have any accounts that are past due, it’s important to bring them current as soon as possible to start the process of restoring your credit.
Pay down credit card balances. Amounts owed (credit utilization ratio) is a measure of how much of your available credit you’re using. It’s an important factor in credit scoring models. A lower credit utilization ratio is generally considered better, as it indicates that you’re using a smaller percentage of your available credit. High credit utilization ratios can negatively impact your credit score and may signal to lenders that you’re a riskier borrower.
- To calculate your credit utilization ratio, you divide the total amount of credit you’ve used by the total amount of credit available to you. For example, if you have a credit card with a $5,000 limit and a current balance of $1,000, your credit utilization ratio would be 20% ($1,000 ÷ $5,000 = 0.20 or 20%).
Only open new credit accounts as needed. The FICO scoring model considers the length of credit history as a factor in determining your credit score. A longer credit history generally indicates greater financial responsibility and stability, which can be viewed positively by lenders. Here is why you should sparingly open new accounts:
- When you open a new credit account, it can actually have a negative impact on your credit score. This is because it lowers the average age of all your accounts, which is a factor that is taken into consideration when calculating your credit score.
Essentially, the longer you have had credit, the better it is for your score. Additionally, when you use this new credit, it can increase the amount of debt you owe, which can also negatively impact your score.
The Takeaway
While there is no set credit score for a particular age group, it is important to understand the average credit score by age as a benchmark. According to recent data, the average credit score for those in their 20s is around
