According to Experian, the average FICO credit score among all Americans is 714. Overall, that’s considered a “good” score, and that’s a number practically anyone can achieve if they practice smart financial habits. While credit scoring models don’t factor in a person’s age, seeing how various age groups are faring can help you know where you stand when compared to your peers. If you’re wondering, “What is the average credit score by age?” here’s what you need to know.
How Age Impacts Credit Scores
As mentioned above, credit bureaus don’t factor in a person’s age when calculating credit scores. However, the length of your credit history – particularly the average age of your accounts – is part of the calculation. While the length of your credit history isn’t as critical as your payment history and specific other factors, it can still influence where you stand.
Additionally, younger adults usually have less information on their credit history since they’re typically new to borrowing. Finally, they may not have a solid mix of credit products – such as installment and revolving debts – particularly if they’re not yet eligible for a credit card.
As a result, younger adults usually have slightly lower credit scores than older ones. Still, it’s possible to have a good-rated or better credit score at essentially any age by making wise financial decisions.
What’s the Average Credit Score by Age?
Generally, credit scores aren’t broken out by individual ranges, as that level of detail isn’t always necessary. Instead, many groups that analyze that data focus on age groups. Here’s an overview of the average credit score by age range:
- 18 to 25 years old: 679
- 26 to 41 years old: 687
- 42 to 57 years old: 706
- 58 to 76 years old: 742
- 77+ years old: 760
How to Improve Your Credit Score at Any Age
The techniques you want to use to increase your credit score generally work regardless of a person’s age. The most critical step is to ensure you’re making on-time payments, as that has the biggest impact on your credit score. Even a single missed payment can knock your FICO credit score down by up to 180 points, so ensuring you’re on time is essential.
Keeping the amount owed low also makes a difference. Credit scores factor in your credit utilization ratio, which is a percentage-based figure that compares your total credit lines on revolving credit (such as credit cards) with your current balances. If you can keep that figure low, your credit score is typically higher.
Having a good mix of installment and revolving debt helps a little. The same is true of limiting the number of times you apply for new credit.
The one factor that a person can’t control is the length of their credit history and the average age of their accounts. That only changes with time. However, the latter is impacted by avoiding opening new accounts and keeping older accounts open and in good standing. Just make sure that maintaining an older account also makes financial sense. If not, it’s possible that moving on will serve you best, particularly if you’re other accounts aren’t necessarily very new.
Are you surprised by the average credit scores by age listed above? Would you figure that certain age groups would have a higher or lower average score than they do? Share your thoughts in the comments below.
Read More:
- Understanding Credit Scores
- Is It Possible to Raise Your Credit Score 100 Points Overnight?
- What Are the Best Ways to Repair Your Credit Score?
Come back to what you love! Dollardig.com is the most reliable cash back site on the web. Just sign up, click, shop and get full cash back!
Image and article originally from www.savingadvice.com. Read the original article here.