Boost Your Credit Score Regardless of Age

People are more conscious of their credit scores than ever before. Although more consumers are earning higher credit scores, younger consumers seem to be left in the cold. This blog article explains why younger consumers have lower credit scores and how to improve them. To learn more about the benefit of having great credit, read this article

The Information Age

It's never been easier to learn more about your credit score and history. As a result, people's scores are higher than ever. Age is an advantage with older Americans having higher credit scores than younger ones. VantageScore, which was created by the credit reporting agencies Experian, TransUnion and Equifax, details this trend. The VantageScore ranges from 300 to 850, with 850 signifying exceptional credit. 

There are many reasons why older consumers have better credit score averages than younger consumers. 

1. A long credit history contributes to a higher score. 

While amounts owed and diversity of credit contribute to your credit score, payment history and credit length together make up half of the total credit score. Since younger consumers, especially those under the age of 25, have relatively short credit histories, it can be challenging to achieve stellar credit. 

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2. Younger consumers may not have a well-rounded mix of credit types.

This includes a mortgage, car loan, credit cards, etc. While they may have student loans and a credit card or two, they may not have had the need to purchase a home or new car as the older generations did at that age. 

3. Younger consumers tend to have lower incomes than older consumers. 

Since many are at the beginning of their careers, they'll likely earn less than others who are well-advanced into their careers or retired. As a result, they may not qualify for high credit limits, which would lower their debt-utilization ratio. Additionally, it's often challenging, though not impossible, to take control of debt with a low income. 

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The good news is, over time the score will increase, especially if you utilize these habits:

  • Keep making payments on time. You'll build habits with each payment you make. 
  • Use credit responsibly. If possible, avoid new inquiries and opening new accounts. If you're rate shopping, do so within a small window so it doesn't raise any flags on your credit. 
  • Avoid carrying high balances on your credit cards. Pay down your debt and keep your balance less than 30 percent of your total available credit. 

About Our Team

The Sherri Patterson Team specializes in residential real estate and relocation, with a combined 50+ years of experience serving the Sacramento, El Dorado, Placer and Yolo counties. We work directly with hospitals, physicians and medical professionals. Whether you're looking to buy, sell or relocate to the Greater Sacramento area, we are the premier real estate team of choice. Our office is located at Keller Williams in Folsom, CA.