Why Do Credit Scores Increase with Age?

Does age have an impact on credit scores? The short answer is yes. Data shows that different generations have distinct credit scores. 

Individual credit scores are used by financial institutions and lenders to determine eligibility for favorable rates and terms for financial products and services. For example, a higher credit score typically earns borrowers lower rates on personal loans. Luckily, you don't start at zero, but it is critical in the early days to not let your credit suffer.

Before we look at why age might impact a credit score, let’s look at the credit score averages per generation. 

Gen Z, which includes anyone born after 1997, and millennials, born 1981 – 1996, have the lowest credit scores of any generation. They are nearly identical, with Gen Z at 667 and millennials with an average of 668. Gen X, people born 1965 – 1980, tend to have slightly higher scores with an average of 688.

Average scores start to jump with the next generation, the Baby Boomers, born 1946 – 1964. Boomers boast an average credit score of 731. But the highest generational average of 756 belongs to what’s known as the Silent Generation, anyone born 1928 – 1945.

When it comes to credit scores, it looks like age can be an advantage. But why?

So it turns out older generations are more likely to have higher credit scores. Two main factors? Firstly, older consumers have longer credit histories, and the age of an individual’s accounts is an important factor in calculating credit scores. 

Plus, older borrowers have had more time to learn from their mistakes and practice financial responsibility. They may also have taken advantage of certain financial products to build their credit, such as consolidating credit card debt or stretching out a large purchase with a personal loan. 

As you can see from the above data, the average credit score increases with age. No matter what generation you’re in, responsible use of financial products like personal loans to consolidate debt or pay for large purchases over time can help you build your credit. For consumers interested in using a personal loan to consolidate debt and to potentially help build their credit and raise their score, Fiona matches you with personalized offers so you can compare to see which personal loan works best for you.