Your credit score is not calculated with your age in mind. So, with that in mind, why do people’s credit scores tend to go up with age?
And what is a bad credit score? How can you start out on the right foot with an above-average score for a 20-year-old? We’ll walk you through the stats to help you understand what a typical credit score looks like for people your age.
We’ll also outline a few tips to help you get your credit on track for success. Let’s begin!
What is a good credit score?
Credit scores range anywhere between 300 and 850, though anything above 700 is considered a good credit score. But don’t worry if your credit score is under 700. There are many ways to raise it.
Why is a healthy credit score important?
A credit score is a rating based on your ability to pay back debt, and it’s a number stored by credit bureaus. You want to have a healthy credit score because this is the first measure that is checked when you try to qualify for loans and financing assistance.
For example, when you apply for a loan to purchase a home or a car, your lender will perform a credit check. From there, your lender will determine if you can qualify for the loan based on your credit score.
If you do qualify for a loan, then your lender will set an interest rate based on your credit score. The better your credit score is, the lower the interest rate.
Is your credit score struggling? There are ways to improve your credit score! Our Credit Builder Plus program is a great way to do this. With a MoneyLion Credit Builder loan, you’ll be able to get back on track and establish twelve months of good credit.
All you have to do is focus on paying off your loan. We’ll report your on-time payments to the three major credit reporting agencies. You’ll even get a portion of the money from your loan upfront! Start improving your credit today.
Credit score averages
Did you know that your age doesn’t play a role in the calculation of your credit score? Even so, the length of time you’ve spent paying off your loans does affect your score, so time is on your side when it comes to improving your credit.
So, what’s the average credit score for a 20-year-old? We’ve rounded up credit scores by age below!
| Age | Average Credit Score |
| 23 to 29 | 660 |
| 30 to 39 | 672 |
| 40 to 49 | 683 |
| 50 to 59 | 703 |
| 60 to 69 | 733 |
| 70 to 79 | 754 |
| 80 to 89 | 757 |
| 90 to 99 | 753 |
5 key credit moves for 20-year-olds
Why wait until you’re older to improve your credit score? You are, after all, trying to enjoy your twenties. Why let your credit score hold you back? Here are some tips for raising your credit score as a twenty-year-old.
Pay your bills in full and on time
Paying your bills in full and on time each month is the best thing you can do in your twenties. Your payment history accounts for 33% of your credit score, so this is crucial for establishing success and increasing your credit score.
You’ll also want to pay your bills every time they are due in order to avoid interest payments, which tend to be set at a higher rate in your twenties. This might be easier said than done for someone just starting out in life, but it’s crucial.
Unexpected expenses might pop up, and this can derail your ability to pay your bills if you have not established a solid savings plan in case of emergencies. This is why we recommend paying careful attention to your budget in your twenties.
Find a good credit card company
Credit cards can be hard to qualify for as a twenty-year-old because you will likely have little to no credit when applying. That’s why it’s smart to find a good starter credit card that comes with a low credit limit. This way, you won’t be able to spend more than you are capable of paying back.
Secured credit cards are a great option because you often have to deposit the credit limit amount to open one. This value is usually around $250. With this model, your new card will come with a safety net.
Your first credit card will usually come with high-interest rates, low limits, and few rewards. So, if and when you are able to upgrade to a more favorable credit card, don’t hesitate. Do it!
Don’t use all of your credit
It may be tempting to spend your entire credit limit. But this is not a good idea because it does not help your credit. Credit agencies like to see you pay off your credit card bill, but they don’t want you to use all your available credit. They’ll rate you according to your credit utilization, so we recommend that you only use 30% of your credit at any given time.
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Pay off your student loans
You don’t need to pay off your student loan debt overnight in order to boost your credit. Paying your loans off in full and on time can help you build your credit score over time, too. It can be hard to establish credit, but your student loans are a good place to start.
Check your credit once a year
You are legally entitled to an annual credit check from each of the three major credit reporting agencies. This is an excellent opportunity to check your progress on a yearly basis. It will also alert you of any red flags, like major issues such as identity theft.
You need to be aware of any and all major changes to your credit score. But don’t check your credit score too often. It’s all about balance, and hard credit checks will lower your credit score, so you don’t want to perform them unnecessarily.
Improve your credit fast with MoneyLion
MoneyLion makes it easy for you to improve your credit score quickly thanks to our Credit Builder Plus program. Our powerful credit-building membership allows you to get a Credit Builder loan with ease. We’ll even give you some money upfront while you are working to increase your score.
As you pay off your credit each month, you’ll get to monitor your credit and watch it increase over time. Every time you pay your loan on time, your credit will be boosted. By the time you pay off the loan, you will have a higher credit score!Once those twelve months of payments are up, you’ll be able to unlock your savings and spend it on what matters to you. Get started with a Credit Builder Plus membership through MoneyLion today!
Written by Jessica Crosby Jessica is a freelance content writer from Nashville, TN. She specializes in writing finance and SaaS content. As a former educator, Jessica is passionate about taking complex topics and explaining them in ways that are easy to understand. You can find her outdoors with her kids, husband, and dog in her free time.
