Credit scores
have often been seen by critics as random—largely due to the numerous elements influencing them—and some individuals even consider them as
discriminatory
. Yet they’re a
necessary evil
To obtain what Americans desire most: houses, vehicles, and reduced insurance premiums.
Building a solid credit history sufficient for a “good” score—typically above 700—can require several years. Many younger consumers lack this. However, a report by
Open Lending
and
TransUnion
One of the primary credit reporting agencies indicates that millennials and Generation Z members are “set” to advance into higher credit brackets. Nonetheless, this might seem improbable to these younger demographics since they generally do not have an optimistic view of the economy and their financial situations—a trend referred to as the “
vibecession
.”
It comes as no surprise that millennials and Gen Zers aren’t feeling very positive about themselves.
credit scores
Ultimately, numerous lenders are “unwilling to provide loans” to applicants with “limited credit histories,” according to Kevin Filan, the senior vice president of marketing at Open Lending. Such individuals typically have poor credit scores or lack an extensive track record demonstrating their ability to repay debts.
Filan stated in a release, “Millennials and Generation Z represent a ‘strategic consumer group’ with significant prospects for advancing their credit standing relative to more senior generations.” He further noted, “Financial organizations that adeptly cater to these ‘up-and-coming prime’ clients via thorough data examination and strategic decisions stand to create lucrative lending possibilities along with lasting client devotion.”
An analysis of the credit scores among young people
In January 2024, the average credit score in the U.S. stood at 715, as reported by various sources.
report
by
Experian
, one of the major consumer credit reporting companies. That score is considered to be right at the top of the “good” credit band, just a few points shy of an “excellent” credit score.
However, millennials and Generation Z members typically have lower average credit scores. The typical millennial has a credit score of around 690, whereas Generation Z averages about 680. To provide some perspective, most conventional mortgages require a minimum credit score of 620, as per industry standards.
Rocket Mortgage
.
There are five main factors that affect your credit score, Kendall Meade, a senior financial planner with personal finance company and online bank
SoFi
, told
This encompasses payment history, credit usage, duration of credit history, credit checks, and various credit forms.
Interestingly enough, Open Lending and
TransUnion
The report indicates that millennials and Gen Zers are well-positioned to enhance their credit scores at a faster rate compared to previous generations.
X
Using data from over 4 million American consumers, they discovered that 30% of millennials and Generation Z individuals with limited credit histories advanced to higher credit tiers within two years, compared to only 22% of those from older generations. This difference primarily stems from variations in credit duration and payment records.
That’s because younger generations are beginning anew, according to Joseph Camberato, CEO and founder of the business lending company.
National Business Capital
, told
They begin with an empty canvas and relatively little debt.
When young individuals manage their initial credit cards or car loans effectively by making timely payments, their credit scores rise rapidly. This positive history simplifies the process of obtaining loans later,” explained Camberato. “Conversely, older groups such as Generation X and Baby Boomers may have accumulated greater debts over time, taking longer to resolve these issues on their credit records. Moreover, as they reduce their expenditures, they tend to pay less attention to improving their credit ratings.
Just because someone belongs to a younger generation doesn’t necessarily mean they do so.
credit score will improve
They must still settle their credit card balances entirely every month and only spend what they can afford, Meade cautioned.
“Although this trend is beneficial for younger consumers, it is crucial that they keep track of their debt levels,” she stated.
A variant of this tale was initially released on
on
March 25, 2024.
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From
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Here are the top credit card offers for March 2025.
The tale was initially showcased on
