What Is the Average Credit Score for a 21-Year-Old?

A credit score is a numerical representation of an individual’s creditworthiness, typically ranging from 300 to 850. Lenders, landlords, and even insurance providers use this three-digit number to assess the risk associated with extending credit or services. A higher score generally indicates a lower risk, making it easier to qualify for loans, secure housing, and sometimes even obtain better insurance rates. Managing your credit score is important, as it influences access to financial products and services.

Average Credit Scores for Young Adults

The average credit score for a 21-year-old in the United States is around 680. This score is considered to be in the “good” range. However, it is lower than the overall national average for all ages, which was 717 in 2023. This difference often reflects the limited credit history that younger individuals have accumulated.

Credit scores tend to increase with age, as older generations have longer credit histories and more established financial behaviors. A score of 680 indicates responsible credit management, but improvement is possible. While this score can facilitate access to financial products, a higher score could lead to more favorable terms and lower interest rates.

Understanding Credit Score Components

Credit scoring models, such as FICO and VantageScore, analyze several factors to calculate an individual’s credit score. These components are weighted differently, with some having a greater impact than others. Understanding these elements provides insight into how scores are determined.

Payment history is the most significant factor, accounting for approximately 35% of a FICO Score and around 40% for VantageScore 3.0. This component reflects whether payments have been made on time and consistently. The amounts owed, also known as credit utilization, is another major factor, making up about 30% of a FICO Score and 20% of a VantageScore 3.0. This refers to the proportion of available credit that is currently being used, with lower utilization is more favorable.

The length of credit history contributes around 15% to a FICO Score and about 21% to a VantageScore 3.0. This factor considers how long credit accounts have been established, including the age of the oldest account and the average age of all accounts. New credit, which includes recent credit inquiries and newly opened accounts, makes up about 10% of a FICO Score and 5% of a VantageScore 3.0. Credit mix, or the variety of credit accounts managed, accounts for approximately 10% of a FICO Score and is part of the “depth of credit” for VantageScore 3.0.

Strategies for Building and Improving Credit

Establishing and improving a credit score involves consistent, responsible financial habits. For young adults just starting, several avenues can help build a positive credit history. One common approach is obtaining a secured credit card, which requires a cash deposit that often acts as the credit limit. This deposit makes it easier to qualify, and timely payments are reported to credit bureaus, building a positive payment history.

Student credit cards are another option for those enrolled in higher education. These cards often have lower credit limits and may be more accessible for students with limited or no credit history. Some student cards may require proof of income or a co-signer if the applicant is under 21. Becoming an authorized user on an established credit card account can also help build credit, as the authorized user benefits from the primary cardholder’s responsible payment history, provided the issuer reports this activity.

For those with some credit history looking to improve their scores, making all payments on time is important, as payment history is the most influential factor. Setting up automatic payments can help prevent missed due dates. Maintaining a low credit utilization ratio is equally important; it is recommended to keep the amount owed below 30% of the total available credit across all accounts, though lower is better. Regularly checking credit reports for errors and managing existing debt responsibly also contribute to a healthier credit profile. Credit-builder loans, where payments are made into a savings account before the loan amount is received, can also demonstrate consistent payment behavior to credit bureaus.