Monday, September 21, 2020

What is a good credit score?

Question: Is 695 a good score for a 19-year-old? I do everything I can do to increase it. What else can I do to make it better?


In the U.S., age can have a factor on your credit score, because the length in time of your credit history comes into play. For example, if you have an account which you have payed on time (such as a credit card) for 20 years, this will contribute to a higher score than if you’ve only had the account 1 year. Other than that, the credit bureaus don’t care how old you are.

But, 695 is not a bad score for someone your age. If you continue to make on-time payments, keep your credit utilization low, and don’t continually open new accounts, you’ll see your score go up. There are some good articles about credit scores here: Credit Score Advice - Credit Advice by Experian

The average credit score for someone in their 20s, as reported by wallethub, is 662. So your score is above average. What Is the Average Credit Score in America? Average Credit Scores by Age, State, Year & More

If you are making rent, utilities, phone and other payments, you might boost your score with Experian by using their Boost program. My daughter said she saw a 20 point bounce in her score. You can apply for that at their website above.

Income has no play in your credit score, so if someone tells you a higher income equates with a higher score, show them the door. Only how you use your credit.

Here are the factors that will increase your score.

  1. always make on-time payments
  2. keep your credit utilization below 30 percent.
  3. maintain accounts for a credit history
  4. keep hard inquiries to a minimum
See this for tips on improving your credit: Improve Credit - Credit Advice by Experian

See my blog for steps for good personal finance: Six Steps to Financial Freedom

You seem to be on the right track. Keep it up and you’ll do well.

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