Age, State, and Income-Based Average Credit Scores

Average Credit Score By Age

Your credit score will become more important as you get closer to critical financial turning points in your life, such as acquiring your first home, financing a new vehicle for the family, or seeking to acquire credit to pay for the braces your children need to get.

As you become older, achieving these financial milestones might result in better ratings, but several other variables may also impact you. The average credit score by age is discussed here, and your location and income may affect this average. Additionally, we’ll provide advice on how to raise your credit score.

Different kinds of credit scores

Although there are other credit scoring methods, FICO® Score and VantageScore are now the two most popular ones. Here are some similarities and differences between them.

FICO Credit Score 

The credit score that receives the most attention is your FICO score. In fact, despite using a separate scoring algorithm, it has grown so widespread that lenders sometimes erroneously refer to all credit scores as “FICO” ratings.

Data analytics business FICO Score, formerly Fair, Isaac, and Company, determine Americans’ FICO Scores. Today, more than 90% of the nation’s top lenders utilize the FICO Score. The FICO model includes several scoring methods, including ratings for specific sectors like automobiles, credit cards, and mortgages.

There may be modest differences in your score since each of the three main credit bureaus—TransUnion®, Equifax®, and Experian®—offers its own FICO Score. For this reason, many lenders use all three scores and base their decision on the median score when assessing your creditworthiness.

Let’s suppose, for illustration purposes, that your FICO scores are 650 from TransUnion, 685 from Equifax, and 705 from Experian. Your 685 Equifax score would be used by a lender that bases its credit decision on the median score.

What factors make up a FICO Score?

The creditor is the one who ultimately decides if a credit score is “good” or “poor.” However, the fundamental FICO Score 10 model presents it as follows:

  • Lower than 579: Poor
  • 669 to 580: Fair
  • 660 through 739: Decent
  • 740 through 799: Excellent
  • 800 or higher: Outstanding

The FICO scoring methodology considers several variables and how they may affect your credit report. The following are the variables that affect your FICO Score and the weight they have:

  • History of payments: 35%
  • Amounts owed: 30%
  • Duration of credit history: 15%
  • 10 percent for fresh credit
  • Credit percentage: 10%

Credit score from VantageScore

The VantageScore formula has been altered, much like the FICO scoring methodology. There are some noticeable changes, however.

There are no industry-specific rating methods used in the VantageScore methodology. Additionally, it only offers one score based on your credit reports instead of a different score for each credit agency.

How is a VantageScore credit score calculated?

The VantageScore 4.0 system employs FICO’s 300–850 point credit score range. However, VantageScore has a distinct definition of what constitutes a “good” or “poor” credit score. The summary is as follows:

  • 300 to 600: Subprime
  • 601 to 660: Near prime
  • 661 to 780: Prime
  • 781 to 850: Superprime

The VantageScore 4.0 methodology balances many elements to establish your ultimate score, just as the FICO scoring model does. The features and their weight are as follows:

  • 41% – Payment history
  • 20% – Depth of credit: 
  • 20% – Credit utilization
  • 11% – Recent credit
  • 6% – Balances
  • 2% – Available credit

Age-Related Average Credit Score

You may want to keep your credit score private, but knowing how you stack up against your peers is never a bad idea. Knowing the average credit score for your age group might give you an idea of how effectively you and your friends handle your money.

According to age, the typical FICO credit score is as follows:

  • Gen Z (18 to 23): 674
  • Young adults (24 to 39): 679
  • Gen X (40 to 55): 698
  • Baby Boomers (56-74): 736 
  • Silent generation (75 and older) 758

Naturally, older age groups often have better credit ratings. Life milestones and longevity have a significant role in this.

Your credit age is relatively young since you usually create a credit profile from the start in your late teens and early 20s. You may have a year or two of credit history on average. Therefore, this category would have the lowest average credit score. The average age decreases each time you obtain a new credit card or incur new debt.

Because you’ve had a decade or more to build a solid payment history and extend the breadth of your credit history, your credit score may arise in your 30s. At this stage, you’ve probably also accumulated various debts, including credit card debt, auto loans, and maybe even a mortgage. All of these actions increase your credit score.

The average age of your credit continues to increase. You are in your peak earning years in your 40s to 50s. Therefore your income has increased. Increased credit limits might result from more income, which decreases your credit usage rate and raises your credit score.

By the time you are in your 60s or 70s, you are either retired or close to retiring, and you have paid off your debt to prepare for life on a fixed income. The law is also on your side since it forbids creditors from deterring you from applying for credit based on age (Equal Credit Opportunity). In reality, the ECOA permits some age groups—specifically, those over 62—to be favored by credit scoring algorithms.

How to Raise Your Credit Rating

Before applying for a new credit line, such as a credit card, mortgage, or personal loan, raising your FICO® Score might be beneficial. You may be able to get better terms and cheaper interest rates with a higher score. The following steps can help you raise your FICO® Score:

  • Pay down every bill on time. This will guarantee that your payment history is spotless and demonstrate to lenders that you have a track record of responsible credit management.
  • Reduce your credit card debt. Your credit usage ratio will remain healthy if you keep your credit card balances modest.
  • Only apply for credit if you need it. A hard inquiry is often recorded on your credit report as a consequence of credit applications. These might temporarily negatively impact your credit score, and if you apply for credit usually, that impact can increase. Reducing the average age of your credit accounts by taking on a lot of new credit might also affect your score.

You can better grasp what lenders see when they review your credit report if you are aware of your credit profile.

Content Editor and Writer at Payday Champion | + posts

Aubrey Saffa Bender has been a freelance journalist and journalist since 2013. She writes about topics that range from personal finances and education to technology and business. In her work for PaydayChampion, Aubrey primarily draws from her writing experiences regarding mortgages, home purchases, and real estate. She graduated with a B.A. with a major in English at The University of Colorado Boulder.

Author: Aubrey Saffa Bender

Aubrey Saffa Bender has been a freelance journalist and journalist since 2013. She writes about topics that range from personal finances and education to technology and business. In her work for PaydayChampion, Aubrey primarily draws from her writing experiences regarding mortgages, home purchases, and real estate. She graduated with a B.A. with a major in English at The University of Colorado Boulder.

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