Will Your Credit Score Improve as You Get Older?

Some things get better with age -- wine, some cheeses…and credit scores!? Research from The Ascent found that older Americans have higher credit scores on average -- for example, the average credit score for baby boomers is 742, while the average credit score for Generation Z is 679.

Does this mean that as you age, your credit score will naturally rise? Well, no -- but as you get older, it is easier to affect positive credit score change. Let's take a look at why older Americans have higher credit scores, and see a few ways you can boost yours, whether you're just getting started with credit or have been using it for decades.

Why do older Americans have better scores?

In short: They've had longer to establish a long and deep credit history, and they're also more likely to have a mix of credit accounts. The length of your credit history is one of the five factors that makes up a FICO® Score (the most popular credit-scoring model) and it represents 15% of that three-digit number. Simply put, it's good for your credit score to keep revolving credit accounts open for as long as possible, because it shows lenders you can manage one successfully over a long period. If you're very young (say, a member of Gen Z), you haven't yet had long to build up a credit history, while someone in their 60s or 70s has.

Credit mix is also important to your credit score, and makes up 10% of a FICO® Score. Credit mix refers to the different types of borrowing out there. For example, if you have a mortgage loan, two credit cards, and an auto loan, you have a good credit mix. If you can keep up with payments on all these different accounts, it shows lenders you know how to manage different types of credit. Again, older folks have the edge here. It's more likely that a baby boomer owns a house than a member of Gen Z, for example.

So how can you improve your credit score?

Now you know that older Americans' higher credit scores are less a function of age and more a function of circumstance. You can't hit fast-forward on time itself (and you shouldn't want to; enjoy living without joint pain as long as you can, you young whippersnapper!). Here are a few ways to whip your credit score into shape now, while you're waiting for your credit history to age and to reach the point in your life where you can finance a big purchase like a home:

• If you've occasionally been lax about paying your creditors (such as your credit card issuers) on time every month, tighten that up. On-time payments are reflected in 35% of your FICO® Score.
• You might not be able to afford a mortgage quite yet, but you likely need a car. Are you able to buy a good used car with an auto loan? Taking on an installment loan (that you can afford and to buy something you need!) will diversify your credit mix, so if you've already got one, read the above tip again.
• While it may be tempting to apply for every shiny new travel credit card you encounter, resist the urge. Limiting new hard inquiries on your credit can keep your score looking its best.

If you're just getting started with credit and languishing with a lower credit score than you'd like, don't lose hope. Over time, you'll be able to boost your score by improving your credit mix and keeping your current accounts open and in good standing over the long run, but for now, look to the tips above.