Your credit score becomes more important as you approach critical financial moments in your life, like buying your first home, financing a new family car or trying to get approved for credit to pay for the kids’ braces.
Reaching these financial milestones can translate to higher scores as you age, but there are several other factors that may affect your average credit score. But before we dive into the average credit score by age, let’s get a firm understanding of the leading credit scoring models and how they compare to one another.
Types of credit scores
There are many credit scoring models, but the two main models used today are FICO and VantageScore. Here’s how they are alike and what sets them apart from one another.
FICO credit score
Your FICO credit score is the one you hear about the most. In fact, it has become so common, lenders sometimes mistakenly use “FICO” to describe all credit scores, even those using a different scoring model.
FICO, which was originally named Fair, Isaac and Company, is the data analytics company that calculates Americans’ FICO scores. The FICO score is now used by more than 90% of leading lenders in the U.S. Within the FICO model, there are multiple scoring systems, including those for specific industries like automotive, credit cards and mortgages.
The FICO model has been through a number of changes since debuting in 1989, and its latest model is the FICO Score 9. Current FICO base scoring ranges from 300-850, and industry-specific scores, such as auto loan scores and bank card scores, range from 250-900.
On top of the different versions of your FICO score, each of the three major credit bureaus — Transunion, Equifax and Experian — offers its own FICO score. This may result in slight variations in your score between the different bureaus, which is why many lenders look at all three scores and use the median score to determine your creditworthiness.
For example, if you have a 650 Transunion score, a 685 Equifax score and a 705 Experian score, a lender that focuses on the middle score will make its credit decision based on the 685 rating.
What’s in a FICO score?
While the creditor ultimately determines what a good or bad credit score is, the base FICO Score 9 model lays it out as follows:
- 579 or lower: Poor
- 580-669: Fair
- 670-739: Good
- 740-799: Very good
- 800 or higher: Exceptional
When determining a final score, the FICO scoring model ranks various factors on importance and the amount of impact they have on your credit report. The factors and the weight they carry on your FICO score are as follows:
- Payment history: 35%
- Total debt: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 10%
VantageScore credit score
Like the FICO scoring model, the VantageScore model has been through multiple variations, but it lacks industry-specific scoring systems. It also differs because instead of offering an individual score for each credit bureau, it gives one score based on your credit reports from Transunion, Experian and Equifax.
What’s in a VantageScore credit score?
The VantageScore system uses the same 300-850 points system as FICO, but its determination of poor to excellent credit varies slightly. Here’s the breakdown:
- Very poor: 300-499
- Poor: 500-600
- Fair: 601-660
- Good: 661-780
- Excellent: 781-850
Like the FICO scoring model, the VantageScore also weighs various factors to deliver a final score, but it does not publicize the percentage of impact that each factor has.
Organized from most important to least important, the VantageScore model considers your total credit usage, balance and available credit, credit mix, payment history, credit history age and new accounts.
Average credit score by age
While your credit score might be something you want to keep private, knowing where you stand among your age group will give you an idea of how you’re managing your personal finances.
In 2019, Experian determined the average credit scores of folks ages 20-60 to see where each age group landed. Unsurprisingly, the higher the age, the higher the average credit score.
According to Experian’s research, people ages 20-29 were lowest on the list with an average FICO score of 662, while people over the age of 60 had the highest average score of 749.
To summarize, the average FICO credit score by age is as follows:
- 20-29: 662
- 30-39: 673
- 40-49: 684
- 50-59: 706
- 60+: 749
So, why do credit scores vary so much based on age groups? A lot of this has to do with what’s going on in the average person’s life.
In your 20s, your credit age is still very young. This means your average credit age could be just a year or two old. Every time you take on a new credit card or debt while in your 20s, it can make a significant impact on your credit’s average age. Also, in your 20s you’re still in the process of building a credit profile from scratch.
In your 30s, your credit ticks upward because you’ve had 10 years to establish a good payment history and average credit age. At this point, you’ve also likely established a better mixture of debts, including credit cards, car loans and maybe even a mortgage, which helps improve your credit.
As you continue moving through the years, the average age of your credit continues to rise and the account mix improves. In your 40s through 50s, you are also in your prime earning years, so your income has likely improved significantly. This higher income can lead to higher credit limits, which lowers your utilization ratios and increases your credit score.
In your 60s, you’re nearing or already heading into retirement and reduced your debt in preparation for living on a fixed income. The law is also on your side, as the Equal Credit Opportunity may prohibit creditors from discouraging you from applying for credit due to age. In fact, the ECOA allows the credit scoring models to favor certain age groups, which happens to be those over 62 years old.
How the average credit score relates to income
While Experian’s data is eye-opening, ValuePenguin offers even more insight as it also shows a direct correlation between income and the average credit score.
To determine the average credit score by income bucket, ValuePenguin looks at the income brackets and research from the Minneapolis Federal Reserve Bank.
According to this data, folks in the low-income bracket who earn less than 50% of the median family income have an average credit score of 664. Moderate income earners, who sit at 50-75% of the MFI, have a 716 average credit score. Middle-income folks, who are at 80-119% of MFI, have an average credit score of 753. Finally, upper-income individuals who earn more than 120% of the MFI have an average credit score of 775.
To summarize, the average credit score by income is as follows:
- Low income (<50% of MFI): 664
- Moderate income (50-79% of MFI): 716
- Middle income (80-119% of MFI): 753
- Upper income (>119% of MFI): 775
Average credit score by state
Age and income aren’t the only variables when it comes to credit scores. As Experian’s data demonstrates, the state you live in can also have an impact. The lowest-ranking state on Experian’s list is Mississippi, where residents have an average FICO credit score of 667. Meanwhile, the state with the highest average credit score is Minnesota at a whopping 733.
Below average? Boost that score
If your credit score is lower than others in your age group, don’t fret. Your credit score can vary widely from month to month. Plus, getting your score at or above that average mark can be relatively simple by following a few credit score tips.
It’s not all about moving the needle upward either. You also want to maintain a good credit score by avoiding mistakes that can significantly lower your score.
While good credit builds a solid financial base, it’s just one piece of your personal-finance pie. If you want to go deeper into your financial health relative to your peers, compare your current retirement savings to the average 401(k) balance by age.