The Average American Credit Score by Age in 2019

Credit is one of the most important financial assets available to those living in the United States.  It is a method that many wealthy people use to make more money (helps the rich get richer).

A great credit score is also the key to many perks, like low-interest rates, free/discounted travel, better housing and more.

Do you know your FICO credit score?

If you don’t know your FICO credit score, there are several services that allow you to check your credit score for free. First check your local bank or credit card company to see if they provide you a Free credit score checker (most do) and if not, head to https://www.freecreditreport.com/.

Try to get in the habit of monitoring your credit at least once a month. This will help protect you from identity theft and eliminate any surprises.

What’s your credit score compared to the average American FICO credit score?

Note: This post is for educational purposes only, please speak with a financial advisor for any financial advice! Read full disclosure policy.

To my surprise, the average American’s credit score is much higher than I expected. The average American’s credit score is 704 (according to www.fico.com) and is on an upward trend since 2009!  

Average credit score in america 2019
Source: www.fico.com

I expected the average credit score to be much less than 704 due to the amount of credit card debt in this country. After looking further at the data I found that roughly 41% of Americans have a score of over 750 while 56.2% of people have a score over 700, which is amazing.

But something still didn’t add up and I didn’t really understand how it was so high until I looked at the average score by age.

The average American credit score by age

It turns out the reason why the average American credit score is so high is due to our senior citizens.

Below is a table of the average American credit score by age (sourced from FICO and Experian).

Again to my surprise, these numbers are higher than I expected for all ages. However, the obvious pattern is the younger the individual, the lower the credit score.

Why is the average American credit score so much lower for young Americans?

You can see in the graph above that young Americans have significantly lower scores than older Americans. Why is that? Well, it is likely due to how young Americans manage their credit compared to older Americans who have been learning from experience and building their credit over time.

A FICO credit score is calculated by 5 categories, each with a specific weight that goes into the calculation.

The Quickest Way to increase your credit score. Looking to increase your credit score? Get added to another persons credit card account as an authorized user.
5 Key categories that calculate your credit score.
  • Payment History – 35%
  • Amounts Owed (Credit Utilization Ratio) – 30%
  • Length of Credit History (Average Credit Age) – 15%
  • New Credit – 10%
  • Credit Mix – 10%

It is safe to say that as American’s age, their knowledge of personal finance increases and so does their credit. Older Americans likely have:

(please note this always isn’t the case, but we’re talking averages)

  • Better payment history over time –
    • Longer/better track records
    • If you never missed a payment over 20-30 years that has a huge positive impact on your credit score.
  • Fewer amounts owed / better credit utilization
    • Less debt with larger credit limits
    • Credit Cards have low balances, mortgages are paid off, car loans are paid off, etc
  • A longer length of credit history
    • Someone who is 50-60 years old has a longer length of credit history than someone fresh out of college
  • Fewer applications for new credit
    • It is less likely to apply for new lines of credit during retirement, etc
  • Larger credit mix
    • due to your long credit history, it is likely you have a great track record with different forms of borrowing and paying off your debts (mortgage, credit card, car loan, student loan, etc)

However, don’t let this discourage you. You do not have to wait until you’re older to have a good credit score. In fact, I’ve had a FICO credit score of over 740 since I was 22.

There’s hope, you can have a high credit score at a young age!

One misconception is the belief that you need to have a long history of credit to have a good credit score. This is simply not the case, rather you can have a strong score with just a few years of credit.

I think the root of this misconception or unawareness of how to manage credit lies within the education system. 

If this was taught to students in high school when they are preparing for adulthood it would likely change the pattern of low credit scores for the average young American and could potentially change some of the spending habits of Americans.

For example, students would learn that they can apply for their first credit card at the age of 18 years old and start building credit early. In fact, they would also learn that they can become an authorized user at an even younger age.  Here’s a post on how becoming an authorized user can be the quickest way to increase your credit score (if you do it correctly).

Now without the right knowledge of how to manage a credit card and finances, giving an 18-year old a credit card could be detrimental. So it’s important to use credit cards wisely, to help build credit, not destroy it.

Why is credit so important?

I don’t mean to be repetitive but I think it’s really important to reiterate how critical credit is. Believe it or not, your life revolves around your credit score.

For example, if you have a bad credit score, you may run into the following issues:

  • Not able to find a place to live (many landlords require a credit score of 650) if you’re renting.
  • It is difficult to get a mortgage (or you will get a bad interest rate costing you thousands of dollars over the life of your loan)
  • Difficult to get a car loan or lease. 
  • Not able to get loans for business or for personal use
  • Miss out on cashback, insurance protection, fraud protection, and others.

Also, having a bad credit score will make you ineligible for premium travel credit cards, which is how Taylor and I travel for nearly free, saving thousands of dollars on each vacation. Over the last 4 years, Taylor and I saved over $60,000 and experienced things we’ve only dreamed of. This is all thanks to our credit scores and how to use them to our advantage.

What is a good credit score?

A good FICO credit score is typically above 700, however you ideally want to be above 730 if possible.   An acceptable score is around 650, that’s the minimum score I accept for prospecting tenants interested in my rental unit. The highest FICO credit score you can have is an 850.

In reality, having a score of 785 compared to an 850 doesn’t have many differences.  Most banks lend interest rates in thresholds based on your credit score.  For example, (these are sample numbers not real):

  • 600-650 receives 5.5% interest rate
  • 650-720 receives 5.25%
  • 720-780 receives 5.0%
  • 781 receives a rate of 4.89%.

So in this scenario, you ideally you want to get a score above 720 to really start taking advantage of better interest rates, premium travel credit cards, and more.

How can you increase my credit score?   

I teach how to manage your credit and how to improve your credit score in our travel hacking course, which teaches people how to save thousands of dollars on their travel/vacations, but here are a few posts on the topic.

In short, if you understand the breakdown of how your credit score is calculated you will realize which categories have the largest impact on your score.

  • Payment History – 35%
  • Amounts Owed (Credit Utilization Ratio) – 30%
  • Length of Credit History (Average Credit Age) – 15%
  • New Credit – 10%
  • Credit Mix – 10%

The biggest impact is your payment history, do not be late on your payments! If you have late payments on your report, call the credit bureau’s and ask them to remove it. You can also leverage www.cfpb.gov to help dispute any negative impacts to your credit score.

The next biggest impact to your score revolves around your amounts owed or credit utilization score. For example, if your credit limit is $1,000 you do not want to carry a balance of more than $300 or 30%. In reality, you should strive to keep your balance under 10%. This may be difficult if you have a low credit limit. If so, just make sure you pay down your balance to 30% (ideally 10%) of your limit before your statement ends.

Is your credit score better than the average American?  Here's the average American credit score by age in 2019
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Summary

Overall, the average American FICO credit score is 704 according to FICO. Broken down by age, the pattern is as you age, your credit improves.

I likely think this is due to the lack of financial education in the school system. I also realize the other pending factors for younger individuals like student debt and the struggle to get high-paying jobs out of college.

However, I truly believe if you take time and do your due diligence to educate yourself on credit, there’s no reason why you cannot have a strong score. For example, I consistently had a score above 740 since I was 22 years old.

If I can do it so can you and I encourage you to take the step today to start monitoring your credit and do what you can to get your score as high as possible!

If you have any questions please leave a comment below!

About The Author

Kevin Mathers

A washed-up hockey player, surfer, and husband currently working towards financial freedom and showing you how we do it as a couple. I started this blog initially as a personal finance blog but after getting married, Taylor (my wife and best friend) and I decided to switch gears into the travel world sharing our experiences with you along the way.

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