Average credit score by age and location
Average credit scores typically vary based on factors such as age, state, and income. However, none of these factors are actually used to calculate your score. Good credit habits are what matter most.
Let’s explore average FICO credit scores by age and location to find out.
Although your age, state, and income level don't have a direct impact on your credit score, there are some correlations between these factors and credit scores. For example, older age groups tend to have higher average credit scores. And in general, people with higher incomes tend to have higher credit scores.
Average credit score by age
When it comes to calculating your credit score, FICO does take age into consideration--but not in the way you might think. The average length of your credit history is what matters, not your actual age. In other words, your age is generally not a great indicator of credit score, and it’s entirely possible for a young person to have a high score and an older person to have a low score.
Even so, average credit scores usually go up with age. In 2020, when the national average credit score was 710, people in their twenties averaged 680, while those 65 and older had an average credit score of 750.
Why is there an upward trend in credit score when age isn't factored in? One reason is that it takes time to build up a good credit score. Younger people are more likely to have lower credit scores than older people because they have shorter payment and credit histories. When you consider how age relates to the five variables used to calculate a FICO score, it makes sense that older people would tend to have higher scores. The five variables are:
- Newly opened accounts/recent inquiries (10%): Whenever you open a new account, your credit score will be lowered slightly as the lender makes a hard inquiry into your account. However, this only affects your score for a year. If you're older and have already established all the accounts you want, you're less likely to have hard inquiries on your record that could lower your score.
- Credit mix(10%): Credit scorers tend to prefer applicants who can demonstrate responsible financial management across different types of debt. As you age, you will likely have more opportunities to open different types of accounts. For example, an 18-year-old might only have a credit card account, while a 40-year-old might have a car loan, mortgage, personal loan, and several credit cards.
- Credit history length (15%): As time goes on, your account will become older and this will be factored into your average account age. As long as you keep your oldest accounts open, they will continue to contribute to your average.
- Credit utilization rate (30%): As we get older, our income generally increases. And our income can have an effect on the size of our credit limit. The lower your credit utilization ratio (i.e., the less of the total available credit limit that you are using), the greater the chance it will have a positive impact on your credit score.
- Payment history (35%): Older accounts that have made more payments will see an increase in their scores if those payments were made on time and a decrease if too many were made late. The longer someone has had an account, the older they are, and the more history the account will have.
All of the above reasons can help to boost your credit score over time, provided you are consistently paying off debts. This leads us to another reason why average credit scores tend to increase with age: financial responsibility. Generally speaking, people mature and become more responsible with their money as they get older. Plus, the more time that passes, the more time you have to recover from credit mistakes. Many negative credit items will stop affecting your credit score within seven years, as long as you maintain good credit habits.
| Age range | 2020 |
|---|---|
| 75+ (Silent generation) | 758 |
| 56-74 (Baby boomers) | 736 |
| 40-55 (Generation X) | 699 |
| 24-39 (Millennials) | 699 |
| 18-23 (Generation Z) | 699 |
Average credit score by location
FICO data from April 2021 reveals that the average credit score in the United States was 716. 29 states had average credit scores that were higher than the national average. The data also showed that states in Minnesota and Wisconsin generally had the highest average credit scores.
The average credit score in the South was around 675 – which was also the average credit score for Mississippi residents, the state with the lowest average credit score.
According to experts, the reason why some states have higher average credit scores than others is due to other common characteristics that can influence scores. Factors like demographics, unemployment rates, poverty levels, education, and income can all contribute to one’s ability to build a high credit score.
