How Does Age Influence Your Credit Score?

April 22, 2016

It’s often said that things improve with age. A lot of people don’t realize that this is also true as it pertains to your credit score. Credit scores don’t take age into consideration, however approximately 50% of a credit score is based on length of credit history and payment history. Therefore, older people have an advantage. In addition, they also have had more time to clear negative debts or marks from their credit report, which can sometimes take up to seven years to be removed.

Age Groups vs. Credit Scores

According to data obtained by Credit Karma, it is evident that credit scores typically rise along with age. Here is what they found in their research (keep in mind that credit scores range between 300 and 850):

  • The 18 – 24 age group has an average score of 638.
  • The 25-34 age group has an average score of 652.
  • The 35-44 age group has an average score of 659.
  • The 45-54 age group has an average score of 685.
  • The 55+ age group has an average score of 724.

How to Maintain a Good Credit Score

Despite your age, there are things you should consider in order to maintain a healthy credit score:

  1. Monitor Your Credit Report
    It’s never too late to start monitoring your credit report. Doing so will allow you to see items, such as past due payments, which could be impacting your credit score. This will also help identify any mistakes appearing on your report so you can take action to have them corrected, whether they are a simple reporting error or the result of fraud.
  1. Eliminate Nuisance Balances
    Over time, we tend to increase the number of credit cards we have and in most cases they have small balances. It is best to eliminate as many as you can or combine them into 1. This is important because the number of credit cards you have with an existing balance will negatively affect your credit score.
  1. Continue to Use Credit
    Demonstrating that you can responsibly manage credit becomes more difficult once you have paid off all of your debts. One way you can do so is by selectively using your credit card for purchases. Just be careful not to purchase more than you can pay off each month.

Maintaining a positive credit score as you age is wise. You just never know when you will be ready to make a move and having a good credit history will keep you one step ahead. Free credit reports provided by the nationwide credit reporting agencies currently do not include free credit scores. However, your credit card company may provide a free score. Some companies even include credit scores on your monthly statements. Be wary of programs offering “free scores”. If you enroll, they are generally not really free.