Your credit score is a powerful number that directly impacts many of your financial moves. The three-digit number is based on the information in your credit report, which is a compilation of your credit history from businesses where you’ve had credit accounts.
One thing that generally is not a factor in your credit score is your age. With few exceptions, lenders aren’t able to use your age to determine your creditworthiness, and it is never acceptable for a scoring system to negatively impact someone's score because they are 62 or older.
However, there definitely is a correlation between age and credit scores. Research shows that credit scores typically rise with age, but that likely is because of the way scores are calculated. For example, 15% of your credit score is based on the length of time that you’ve been using credit, which is the age of your credit history. The more experience you have with credit, the better, especially if you have a positive credit history. It stands to reason that the older you get, the more experience you have with credit. That experience can give your credit score a boost.
Average Credit Score By Age
A 2021 study measured five age groups, and in each instance, average credit scores were higher as the age groups got older:
|Average Credit Score by Age|
|76 and older||758||760|
As you can tell, younger consumers, on average, have lower credit scores, while older consumers have higher credit scores. For some lenders, a credit score below 670 is considered subprime and would either lead to a denied application or the consumer being approved for less favorable terms.
At 20 years old, most consumers are just starting out with credit, possibly getting their first credit cards. It will take at least six months for a credit score to be generated since that’s the minimum amount of information required for a credit score.
Income, Age & Credit Scores
Income is another age-related factor that could indirectly affect credit decisions. Lenders use income to determine whether a person can afford a new debt obligation, but income isn’t factored into credit scores. However, income does affect a person’s ability to afford their financial obligations.
Having a history of on-time payments can give your credit score a huge lift since payment history is 35% of your credit score.
Average salary also tends to increase with age, which means consumers are better able to afford their bills as they get older and their salary increases.
Age & Level of Debt
Younger people, with lower incomes and less experience with financial obligations, can face greater challenges with their credit. Carrying a large amount of debt, for example, high student loans, auto loans, and credit card balances can negatively affect your credit score given that the level of debt is 30% of your credit score.
Leaving old accounts on your credit report can be beneficial since they lengthen your credit age. Any negative information associated with open, active accounts will fall off your credit report after seven years, leaving you with an account that shows you have years of experience with credit. If you close an account, it eventually will drop off your credit report and shorten your credit age.
As you get older, your credit score kind of improves on its own as your credit report “cleans” itself. Most negative information stays on your credit report for only seven years. After that, it ages off your credit report and is no longer included in your credit report. Financial mistakes of your youth no longer plague you as an older, wiser, more financially savvy adult. As long as you can avoid making any new mistakes, your credit score will rebound over time.
Great Credit At Any Age
None of this means you can’t have an excellent credit score as a young adult. If you’re handling your credit obligations well, your credit score will reflect that. Being an authorized user on an older account with a positive payment history can boost your credit score when you’re young.
Similarly, not every older adult has an excellent credit score. Serious credit mistakes, like repossession and foreclosure, can seriously damage your credit score at any age.
Frequently Asked Questions (FAQs)
How do you check your credit score?
What is the highest credit score?
For most personal credit situations, the highest score you can have is 850. This is the maximum score on the most popular FICO and VantageScore scales, but other, less common scoring methods have slightly different scales.
Consumer Financial Protection Bureau. "Can a Lender or Broker Consider My Age When Deciding Whether to Give Me a Mortgage or Home Equity Loan?"
MyFICO. "What's In My FICO Scores?"
Experian. "What Is the Average Credit Score in the U.S.?"
MyFICO. "What Is Payment History?"
Bureau of Labor Statistics. "Median Usual Weekly Earnings of Full-Time Wage and Salary Workers By Age, Race, Hispanic or Latino Ethnicity, and Sex, Fourth Quarter 2019 Averages, Not Seasonally Adjusted."
MyFICO. "What Is Amounts Owed?"
VantageScore. "How To Implement."