Building a good credit score is essential to your financial life in your 20s. A good credit score can mean better interest rates on loans and credit cards, while a poor credit score can limit your options. But what’s the average credit score for a 20-year-old, and how can you build your credit in your 20s?
A credit score is a three-digit number that represents how credit-worthy you are. In other words, this number tells lenders how likely you are to repay your loans and if you’re a responsible borrower. The most common credit scoring model is the FICO® Score,* which ranges from 300 to 850.¹ The higher your score, the better your credit is.
Learn more about what constitutes a “good” credit score and how to build your credit in your 20s and beyond.
What is a good credit score?
FICO® has different categorizations for credit scores. Here’s how the scores are broken down.¹
| Credit score range | FICO® Score rating |
|---|---|
| Less than 580 | Poor |
| 580-669 | Fair |
| 670-739 | Good |
| 740-799 | Very Good |
| 800+ | Exceptional |
The average FICO® Score has been steady recently at 715.² However, a good credit score for a 20-year-old is likely lower. That’s because if you’re in your 20s, reaching a score of 700 or higher may be challenging as you’re just establishing your credit history.
In your 20s, you’re still beginning your financial journey. One of the categories to determine your credit score is the length of your credit history. Only time can help that part, so if you maintain good financial habits, the hope is that your score will elevate as you get older.
View this post on Instagram
Average credit score by age
Your credit scores can differ drastically by age and the stage of life you’re in. Many factors, such as your credit history and experience with credit, will determine your credit score. So, what is the average credit score? The average credit score by age in 2024 was as follows:²
| Age range | Average credit score (2024) |
|---|---|
| 79+ | 760 |
| 60-78 | 746 |
| 44-59 | 709 |
| 28-43 | 691 |
| 18-27 | 681 |
The average credit score for a 20-year-old will be lower than other generations because you’re just starting out. In your 30s, your credit should start seeing some upward movement as you’ve now had more time to build upon the credit you opened in your 20s. After your 30s, your credit should continue to rise.
What is the average credit score for a 20-year-old?
The average credit score for a 20-year-old in 2024 was 681.² Gen Z (age 18-26) had an average credit score of 681, while Millennials (age 27-42) averaged 691. Based on these numbers, the average credit score by age 25 should be around 680.
Why is a good credit score important?
Let’s be honest: your credit score can seem pretty arbitrary, but in reality, credit scores are so important when getting your first apartment or applying for your first credit card.
Why is this? Because your credit score can make or break whether you get approved for an apartment or a credit card. It can even affect your interest rate; a lower credit score generally equates to a higher interest rate, and vice versa.
Credit scores affect interest rates over time, and interest can cost you a lot of money if you take out a loan. Even the difference between a few percentage points can cost you hundreds or thousands of dollars in interest.
A good credit score can help you save money and get better interest rates.
How to start building credit in your 20s
People in their 20s often don’t have much credit history, which often means a lower score. Your credit score updates about once a month, so you can boost your score quickly by being financially responsible. After learning what affects your credit score, consider these actions to build or boost it.
Make on-time payments
The most important rule is to make all your payments on time. Your payment history determines 35% of your FICO® Score, which has the most significant impact.³ Set up automatic payments where possible to prevent missing due dates, or use your phone’s reminder or calendar app to keep you on track.
Keep your credit utilization ratio low
Your credit utilization is how much of your total credit you use. Credit utilization makes up 30% of your FICO® Score.3 A 30% or less credit utilization ratio is generally considered good.⁴ For example, if you have a credit limit of $5,000 over two or three credit cards, you’ll want to keep your total balance at $1,500 or lower.
If your balance is higher than 30% of your total available credit, make a plan to pay it down, which will boost your credit score.
Avoid closing accounts
You might assume that closing a credit card when you’re not using it can benefit your credit, but the opposite may be true. Your FICO® Score is partially calculated (15%) based on the length of your credit history.³ This includes the ages of your oldest and newest accounts and the average age of all your accounts.
Closing an old credit card can shorten your credit history, and you might see a dip in your credit score.
Have a mix of account types
Credit mix accounts for 10% of your FICO® Score.³ Only having credit cards or loans can hurt your credit score. Instead, aim for a mix of credit cards and installment loans to improve your credit mix.
Avoid opening multiple lines of credit at once
New credit makes up 10% of your FICO® Score.³ Try not to open too many new lines of credit at once. Doing so quickly can look risky to lenders and lower your credit score, especially if you don’t have a long credit history.
Monitor your credit score
Keeping an eye on your credit score lets you know how you’re doing and can be motivating when you see the numbers go up. You can check your credit score by signing up for an account with one of the three major credit bureaus (Experian, Equifax, or TransUnion). Alternatively, check whether your credit card issuer or lender offers free credit scores as one of their perks.
Take responsibility for your credit score in your 20s
Being financially responsible in your 20s and learning how to start building credit can help you boost your score in the long term. While the average credit score for a 20-year-old is 680, which is considered “Good,” you can continue to increase your score through your 20s and beyond, helping you land that apartment, buy a new car, or get your first rewards credit card.
Once you’ve achieved good credit, learn how to maintain a good credit score and stay in good financial standing.