Credit scores impact loan amounts, interest rates and how much you can spend each month. They play an integral role in personal finances, and having good credit yields more opportunities.
Your credit score ranges from 300 to 850, with a good credit score defined as 690 or greater. The average credit score in the United States and across age groups can help you set benchmarks and improve your score over time.
How average credit scores vary
Your credit score moves in relation to your debt and how quickly you pay it off. Credit scores vary by age, state and income.
That’s because these factors influence a person’s experience with financial obligations. These factors have an indirect impact rather than a direct one.
National credit score average
According to 2021 Experian data, the national credit score average in the U.S. is 714. This is a four-point increase from the prior year. That said, VantageScore data pegs the average VantageScore at 698.
Lenders view both of these credit score averages as being indicative of good credit. Knowing the average credit score by age will help you see where you currently stand.
Average credit scores in your twenties
The average credit score of people in their twenties is 660. This fair credit score can help you qualify for most loans, but you may have higher interest rates.
Most people’s credit scores are at their lowest during this stage because people in their twenties have a shorter length of credit history. As they establish a history of making on-time payments, their credit scores will rise.
Average credit scores for your thirties
The average credit score of people in their thirties is 672. Many people in their thirties have gained loans in their lifetimes, including mortgages and auto loans. These loans will improve a consumer’s credit mix and result in more experience making on-time payments.
Average credit scores for your forties
The average credit score continues to rise as you get older. For instance, the average person in their forties has a credit score of 683.
The average person will witness their credit score increase from 660 in their twenties to 683 in their forties, demonstrating the long-term journey of improving credit. You can see quicker gains and grow faster than average, but national averages indicate a long-term commitment to improving and maintaining a high credit score.
Average credit scores for your fifties
The average credit score of people in their fifties is 703. This is the first age group to experience an average credit score above 700.
This age cohort has multiple decades of credit history and repaying debt. Some of these people may have paid off their auto loans and made significant progress on mortgage payments, too.
Average credit scores for your sixties
The average credit score of people in their sixties is 733, which represents the highest average for age groups thus far. A 30-point jump of the average FICO score by age groups is significant.
A credit score of 733 means you will be able to access more perks and obtain attractive interest rates. You can continue to raise your score over time, but it becomes more difficult to see gains as you get closer to the 850 ceiling.
Average credit scores in your seventies and older
The average credit score of people in their seventies is 754. This excellent credit score demonstrates the accumulation of consistent upward trajectories.
People in this age bracket have built decades of credit history, and this experience alone presents a significant advantage. Combine the lengthy credit history with on-time payments as well as healthier balance sheets and it’s no wonder this age group has higher credit scores than the others.
How to work towards a good credit score
Working towards a good credit score will help you exceed the average credit score in your age bracket. A higher credit score can help you get a better loan and lower interest rates. These strategies will help you build your credit score.
Make payments on time
Payment history is the foundation for your credit score. It makes up 35% of your score and keeps other credit score categories in a healthy position.
Only incur new debt if you can pay it off on time. Credit bureaus will learn about late payments and lower your score accordingly. Late payments can snowball and create worse problems for your credit score and financial health.
Keep your balance low
A low balance promotes healthy spending habits and fortifies your credit utilization ratio. Credit utilization makes up 30% of your credit score, and it measures how much of your limit has been used.
If you have a $10,000 credit card limit and you have a $2,000 balance, you’ll have a 20% credit utilization ratio. A 30% credit utilization ratio will improve your score, but credit utilization below 10% will have a more favorable impact on your score.
Pay down existing debt
Paying down existing debt will improve your credit utilization ratio and make you less vulnerable to compounding debt. Overwhelming debt problems usually start from a small unpaid debt.
Only making minimum payments and letting the debt compound can result in poor money habits and a towering balance. Gradually chipping away at existing debt will make it more manageable.
Monitor your credit report for errors
Improving your payment history and lowering your debt can improve your credit score over the long term, but detecting errors in your credit report can immediately raise your score.
Credit bureaus will give your credit report a closer look if you dispute any mistakes. The credit bureaus will remove errors on your report, and since those errors no longer drag your score, you will see a quick increase.
Keep old credit accounts open
Some people close old and inactive accounts, but leaving them open can help your credit. Credit length makes up 15% of your score.
Keeping old accounts open allows them to continue propping up your credit score. Deleting older accounts can hurt your credit score but removing history from your credit profile.
Don’t apply for multiple credit lines at once
Applying for credit lines gives you additional funding sources. It’s good to have extra capital just in case something happens, but applying for multiple lines of credit will hurt your score.
Each credit application triggers a hard inquiry. The lender will conduct a deeper dive into your credit report, and you will lose a few points from the hard credit check.
A single hard pull won’t hurt your credit score but applying for several lines of credit results in numerous credit inquiries that all drag down your score. Soft credit inquiries are okay for your credit score, but lenders usually do a hard check if you’re asking for a line of credit.
Building your credit so that it’s above average
An above-average credit score provides many benefits, and most credit building strategies revolve around effective money habits.
Making on-time payments, budgeting and not taking on too much debt will help you increase your credit score. Credit building is a long-term journey, and staying focused on your financial health will help you raise your score over time.
FAQs
What is the average credit score in America?
According to Experian, the average credit score in America is 714.
What’s the average credit score by age 18?
According to Experian, the average credit score for 18 year olds is roughly 679.
How much is a good credit score?
A FICO score above 670 is a good score.
