Credit scores are a numerical representation of what kind of credit risk you are. Many factors influence your credit score, including the number and types of accounts, your payment history and how long you've had accounts open. Although age by itself isn't a factor in your credit score, age can affect several key items that do directly impact your credit score.
How Age Affects Credit Scores
Your credit score does not include points related to your age. However, it does include age-related items such as the average age of credit accounts listed on your credit profile. Longer, more mature accounts have higher credit scores than new accounts. Therefore, an 18-year-old with little to no credit history will have a lower credit score than an 80-year-old with several decades of established accounts.
Average Credit Scores
According to the website BCS Alliance, the average credit score of certain age groups tends to increase with age. It cites a 2005 Experian National Score Index report that shows the average credit scores for certain age groups. The youngest demographic, ages 18 to 29, has an average score of 637. Ages 30 to 39 follow, with an average score of 654. Ages 40 to 49 carry an average score of 675, while the 50-to-59 age group average 697. Those 60 to 69 have improved credit scores that average 722, and the highest average score of 747 goes to those in the 70-plus age group.
Other Factors That Affect Your Score
Your account history is just one factor that affects your credit score. Other factors include your payment history; if you pay your bills on time your score will be higher. The amount you owe can also affect your credit score. For example, if you carry low balances your score will be higher. Applying for many new accounts can lower your credit score. Your credit score will also reflect the types of credit you have; a healthy mix of credit cards, short- and long-term loans and mortgage loans will have a beneficial affect on your score.
Educating Young People
The fact that credit scores typically increase as you get older is one reason why young people should be educated about credit. Young people should be versed in what credit is and what factors affect credit scores positively and negatively so that they can make wise consumer choices about what effect credit cards and credit have on their credit score in the long run. A good credit score often is an important factor in getting a job, renting an apartment or buying a car.
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