You Might Not Believe Which Generation Has the Highest Average Credit Score

It's a group you don't hear about all too often anymore.

Average credit scores vary quite a bit by generation. In fact, there's a difference of more than 80 points between the generations with the highest and lowest average credit score, according to an analysis by Experian. Here's what it found and which generation comes out on top.

The average credit score by generation

Experian found that the average FICO® Score across the United States is 714. Just to be clear on the terminology, FICO® Score is the type of credit score that's most widely used by lenders.

Here were the averages by generation (the current age group for each generation is included in parentheses):

• Generation Z (18–25): 679
• Millennials (26–41): 687
• Generation X (42–57): 706
• Baby boomers (58–76): 742
• Silent Generation (77 and older): 760

These scores all fall into at least the "good credit" category, which ranges from 670 to 739. Baby boomers and the Silent Generation are in the "very good credit" category from 740 to 799. That's great news, as it shows that a large portion of adults are managing credit well.

As you can see, the average credit score rises by generation. Why is that? Age doesn't have a direct impact on your credit score, but it can have an indirect impact on the factors that determine your score. Here are the factors used to calculate your FICO® Score and how age can sometimes play a role:

• Payment history (35%): Your record of on-time and late payments. Older adults have had more time to build up a long history of on-time payments.
• Amounts owed (30%): How much you owe on credit accounts, and especially on credit cards. Younger adults sometimes need to take on more debt since they're just starting out in their careers and making entry-level salaries.
• Length of credit history (15%): The amount of time you've been using credit. Age plays a clear role here, since the only way to improve this is with time.
• Credit mix (10%): Your mix of revolving credit and installment loan accounts. Older adults sometimes have a more diverse credit mix of loans and credit cards, although this isn't always the case.
• New credit (10%): Your recent applications for new credit accounts. Younger adults may be more likely to apply for new credit, whereas older adults already have the credit cards and loans they need.

This doesn't mean you can't reach a high credit score if you're young. You can, and it's not that difficult, either. You just need to know how to do it.

How to build your credit score

Even though your credit score might seem complicated, improving it and getting a good one isn't. There are only a few things you need to do for a high score that will qualify you for the best credit cards and the lowest interest rates on loans.

Step one is getting a credit account. To build your credit score, you need to borrow money and pay it back. A credit card or loan will work here, but a credit card is the best option, for a few reasons:

• You can use a credit card without paying interest. If you pay the bill in full every month (which is the best way to use a credit card) you don't get charged any interest on your purchases. A loan, on the other hand, will have interest charges.
• You can keep using your credit card indefinitely. You'll eventually pay off a loan. With a credit card, you can use it every month, pay the bill in full, and continue building your credit, year in and year out.

If you don't have a credit card yet, check out starter credit cards. Since these are intended for consumers just starting out, you don't need a credit history to get approved for one.

Once you have a card, here's how to use it:

• Make at least one purchase per month with your credit card.
• Don't overspend. This puts you at risk of credit card debt and increases your amounts owed, which can lower your credit score. A good rule of thumb is to keep your balance below 30% of your credit limit.
• Pay your credit card's full statement balance by the due date every month.

If you follow those steps, you'll build a good payment history and keep your amounts owed on the low side. Those two factors make up the bulk of your credit score. And as time goes on, your credit history length will increase as well. No matter how old you are, this approach will allow you to build and maintain a high credit score.