Factors that Contribute to Younger People Having Lower Credit Scores

Unfortunately, there’s a negative trend occurring around financial health with each passing generation.

A study done by Experian in 2016 found that Gen Xers (those born in the early 60’s to late 70’s) hovered around a fair 650 credit score¬†rating. Millennial’s, or generation Y (80’s and 90’s), had an average score of 634 (poor). And the up-and-coming Gen Zers (mid 90’s early 2000’s) were also averaging a dismal 631 credit score.

In the study, baby boomers and the silent generation had Vantage Scores of 700 and 730 respectively. So it seems the younger you are, the worse your score is. Why is that?

Well, there are various actions younger people do to either knowingly or unknowingly hurt their credit history, some beyond their control. Here’s a brief listing of issues that have contributed to poor credit scores to younger generations.

Shorter Credit History:

First off, stating the obvious, your length of time using credit plays a substantial role on how well you score. So it’s quite understandable that new cardholders have less history. Therefore, your credit score will reflect that fact.

Remedy this by building your credit score proper by making your payments on time. If you establish yourself as a responsible cardholder, keep your credit cards open as well. The older the account, the more history you have to convince banks you aren’t a risky borrower. Your score will increase as a result.

Student Loan Debt:

Student loan debt can saddle those fresh out of college for years until finally being paid off.  In fact, student loan debt ranks second in largest consumer debt held by Americans, currently at 1.3 trillion in the U.S. (mortgage debt ranks first). The average amount of debt per student was $37,172 in 2016.

With each passing generation, the cost of higher education continues to rise. And unless you’ve landed a lucrative career after college, this can increase the likelihood of being delinquent when it comes to paying off the loan. This, in turn, will hurt your credit score.


Gen Xers were the worst hit by the latest 2008 housing crises. So bad, in fact, they’ve donned the title “Foreclosure Generation” as they were around their 30’s, early 40’s , when traditionally, home-ownership is obtained by then.

A foreclosure can stay on your credit report for 7 years. And thanks to subprime mortgages flourishing before the down-turn, foreclosures in 2008 soared to 81% damaging 861,664 credit scores according to a report from RealityTrac.

Millennials, meanwhile, are holding off on buying homes till student loans are paid off and can afford a decent down payment. According to a study from the National Association of Realtors, millennials, on average, are waiting 7 years to pursue home-ownership until down payment is established.

High Balances on Credit Cards:

Finally, carrying a high balance on your credit card increases your utilization. Ideally, you don’t want to use more than 30% of the available credit you have.

Based on findings from GOBankingRates.com, the younger generation X population (35 – 44), on average, have a $4,000 balance in their credit accounts. Conversely, the older segment of this generation (45- 54) has only a $2,000 balance. This ranks them as having the highest balance between all other generations.

Reasons behind this include childcare, mortgage and senior care-taking for their parents. Keep balances as low as you can. High balances do much harm to your credit score.

To learn more about credit scores, visit is650agoodcreditscore.com.


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