Credit Scores Get Better with Age, Finds TransUnion

A recent survey conducted by national credit bureau TransUnion found that people are more likely to have better credit scores as they become older. The results of the survey are based on an analysis of approximately 10 million consumers’ VantageScore credit scores, which are widely distributed and frequently used by loan providers to make lending decisions.Subprime Credit ScoresCredit scores of 600 or below on the VantageScore scale, which ranges from 300 to 850, are considered subprime scores. The survey showed that millennials are the generation with the highest percentage of borrowers with subprime scores. About 43 percent of people aged 18 to 36 have credit scores that will make lenders hesitate doing business with them. Generation X borrowers, aged 37 to 51, have significantly better credit scores than the millennials, with 33 percent being subprime. The percentage of subprime borrowers continues to drop with age. Only 20 percent of baby boomers, aged 52 to 70, and nine percent of the silent generation, 70 and above, have subprime credit scores.Super Prime Credit ScoresThe super prime category consists of consumers who have excellent credits scores ranging from 781 to 850. Only six percent of millennials belong to this category, whereas 34 percent of baby boomers and over 50 percent of the silent generation are super prime.Use of CreditThe trend of credit scores improving with age is partly the result of the use of credit among different generations. Millennials are the biggest credit users, with a utilization rate of 79 percent, Generation X consumers are a close second with 77 percent, while baby boomers and the silent generation use, respectively, 65 percent and 51 percent of the credit available to them.How Bad Credit Can Affect You?A bad credit score can make it more difficult for you to get approval for a loan. However, it is possible to find lenders that offer bad credit auto loans, home loans, or personal loans. Even if you manage to secure a loan, you have to be prepared to pay a higher interest rate and accept more restrictive terms. Besides being a disadvantaged borrower, you will also experience difficulty in other situations, such as buying insurance, renting an apartment, getting a mobile phone contract, or seeking employment.Your credit score can have a significant impact on many aspects of your life. As such, it is worthwhile to make an extra effort to achieve and maintain a good credit score.