November 18, 2011

Average Credit Score versus Age

The CreditKarma site has data they compiled on average credit score trends versus age groups.

Here are the numbers:

Age Credit Score
18-24 638
25-34 652
35-44 659
45-54 685
55+ 724

I think that it makes sense that on average older people will have better credit scores.  

I can guess of a few reasons why this general trend would occur.

For one older people will have a longer history of credit and more years to compile a credit history.   One of the factors in your credit score is the length of your credit history.   Its impossible for someone 22 years old to have a 20 year credit history but not at all hard for someone in their 40's.  

People make more money as they get older and with a higher income its easier to handle your finances.   Its a lot easier to get go into default if you are getting paid $10 an hour than if you make $25 per hour.

As people age they learn and get wiser and generally 'settle down'.   I made some mistakes with my credit cards when I was in my 20's but I've since learned from those mistakes and will know better now.   I'm not the only person who goes through this experience.  This is a bit of a generalized stereotype of course.  I'm not saying young people are irresponsible and simply aging makes you good with finances.   Many people will do the opposite and are smart with their finances early or end up in credit trouble later in life.


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