Which Generation Has the Best Credit Scores?

Most Americans have good credit, but some generations do better than others.

According to recent research from The Ascent on average credit scores, most Americans have fair or good credit. In fact, the average VantageScore in America was 694 in the first quarter of 2018 -- which is a score most lenders would view as reasonably good.

But while credit scores have been trending upward and the average American is doing OK when it comes to their credit history, some generations of Americans are definitely doing better than others.  

So which generation is winning in the credit score game? 

Which generation has the highest credit scores?

According to The Ascent's research, the silent generation has the highest average credit score of any generation. Members of this older demographic group had an average VantageScore of 729 in 2017. This was a full 26 points higher than the generation with the next highest score. 

As the table below shows, scores went down from there, with baby boomers beating Gen Xers, who had a higher average score than members of Gen Y. But Gen Y members beat out the youngest group, members of Gen Z.  

Data source: Experian.

Why does the silent generation have better credit than other generations?

It should come as no surprise that older Americans generally have better scores than younger ones, nor that scores improve with age. 

Older Americans have had more time to pay down debt, which helps to keep their credit utilization ratios low. They've also had a longer period of time to develop a strong credit history, simply by using their credit cards for longer, and to take out different kinds of loans. All of this affects credit scores, which are calculated based on payment history; amount of available credit used; age of credit; mix of different kinds of credit; and amount of new credit applied for.

As people get older, they also often become more financially stable, which makes them more able to be financially responsible. Silent generation members, for example, are very likely to be retired and collecting Social Security and pension or investment income. They're not dependent on a paycheck to pay their bills, so they may be insulated from, say, unemployment or underemployment that could lead to a missed payment or a maxed-out credit card.

Younger generations have also faced unique financial burdens that many of their older counterparts didn't have to deal with. These include high loan balances and a changing economy that makes it far less likely they'll get a stable long-term job with ample employment benefits. All of these factors can make it harder to engage in the types of borrowing behavior that can lead to great credit. 

So as you can see, there are many explanations for the increase in average credit scores as people get older, and why older generations have higher average scores than younger ones. 

You can improve your credit score

Whether your credit score is on par with others in your generation -- or is a little better or a little worse -- there's likely room for improvement, unless of course you have a perfect score. Practicing good borrowing behavior, including keeping credit balances low and making payments on time, can help you to ensure your credit score is one you can be proud of.