With age comes credit wisdom, according to a new study by Experian, the credit reporting agency. More seasoned Americans have been taking their credit scores and debt seriously in the past year, while Generation X and the Millennials need a helping hand when it comes to building and keeping a healthy credit rating.
The Fourth Annual State of Credit study looked at four generations — the Greatest Generation (ages 66-plus), Baby Boomers (ages 47 to 65), Generation X (ages 30 to 46) and Millennials (ages 19 to 29) — to see which group was having the most and least success managing their credit cards and debt.
Tallying up the generations
While the Millennials actually had fewer credit cards and owed less than their older counterparts, with an average of $23,332 in debt, their average credit scores (628) were the lowest of all the generations. The highest scores in this group averaged 668, 13 points lower than the national average of 681. According to the study the reasons for their low scores can be traced to the Millennials overuse of credit cards and paying their bills late.
Generation X on the other hand, carried the highest amount of debt across all the generations ($30,039). That’s 7.7 % higher than national average. They charged more, had more late payments on record, and had a harder time paying down their debt. All of which led to their overall credit scores taking a beating with an average of 653.
Baby Boomers (700) and the Greatest Generation (735) came out on top when the study looked at their credit ratings. The Greatest Generation had less debt, paid their bills on time, carried lower balances than all their counterparts and used their cards less translating into higher credit scores and less average debt ($23,245).
Baby Boomers have the most credit cards (2.66), and carry the highest balances ($29,317), they came in just 35 points under their elders when comparing credit scores. They pay on time, don’t overuse their cards, and are adept at handling their debt.
What do the national averages say?
The average Americans has two credit cards (2.19) and is $27,887 in debt. The average credit score is 681, with overall scores ranging from 300 to 850.
Where respondents lived also factored into the study, with five cities coming out on top, and five on the bottom.
Cities with top credit scores
Sioux Falls, SD
Green Bay, W
Cities with lowest credit scores
The Experian study was conducted in June 2013, using data from their consumer credit database. The statistical data was developed using VantageScore, which was developed by three credit reporting agencies to generate credit scores.