In 2024, Experian reported that consumers in their 40s had an average credit score of 691 to 709. Why the range? Older Millennials are now in their early 40s, while Gen Xers are now in their late 40s and early 50s. These two generations have different average credit scores of 691 and 709, respectively.
So, why does credit score matter at all? A credit score is a number given by each credit reporting agency that communicates your potential lending risk. Banks and credit companies may use it to determine if you're likely to pay back money you borrow. FICO may be the most common of the scores, ranging from 300 to 850.
What's a good score range at 40 years old? The answer depends on your financial goals, but Experian (the owner of FICO) considers scores above 670 to be in the "good" rating category, no matter your age.
Average credit score by age
It takes time to build a credit score. The earlier in life someone uses credit or has their on-time payments reported to credit agencies, the earlier they can see a good credit score. It can be difficult to build credit before the age of 21 (when most credit card companies let you get your own account in most states). Although, many younger, less-experienced adults can do so with secured credit cards.
Just take a look at the averages for all the age groups:
- 20-year-olds have an average score of 681 (good)
- 30-year-olds have an average score of 691 (good)
Compare this to the 691-709 average scores of those in their 40s, and you can see this pattern of better credit for older consumers in action.
How age affects credit scores
It's not just about having time to build and use credit that matters. The way the scoring system is built can also reward older consumers.
For example, one of the major factors for a FICO score is the age of your credit, including:
- The average age of the accounts
- The age of your oldest account
- The age of your newest account
Experian combines all this information together to determine 15% of your credit score. It may not have as big an impact as paying your bills on time or keeping your total debt amount low, but it certainly matters. Younger consumers with only very new accounts will not score as high as older consumers with very old accounts.
Credit utilization
The credit-utilization ratio may also be out of proportion for younger consumers since it looks at the total amounts owed compared to the credit available. Consider the example of a 20-year-old college student with just one credit card. If that card had a $1,000 limit, and the student charged $750 in textbooks to the card, the student would be using 75% of their available credit. This is a poor utilization ratio that can affect 30% of their credit score. It would be difficult to have a high credit score in this situation.
Compare that to a 40-year-old with several credit cards totaling $20,000 in available credit. If that older consumer put $750 on a credit card, it would cause a less than 4% utilization ratio — a far healthier number. This low ratio isn't likely to negatively affect a credit score like the 75% utilization ratio would.
In this situation, the older consumer with more available credit has a clear advantage.
Experience and wisdom
We may not always give older consumers credit for being wiser, but when it comes to credit, they may show better behavior over time. As they age, consumers may be more financially responsible due to learning from mistakes or prioritizing their money for important things like a family or home. They may also figure out how to handle money better, such as putting it away for savings or setting up automated payments so they always pay on time.
Those in their 40s also have more time to recover from youthful mistakes. If they defaulted on a credit card in their 20s, that credit score will stay lower for some time. By their 40s, it won't show on the credit report at all. (Late payments drop off after seven years.)
Credit score ranges and their implications
You may have asked yourself, "What's a good credit score for my age?" This question is important because lower scores can make credit more expensive.
However, as you age, consumers have more opportunities to improve their credit. Those better credit scores then give consumers access to better financial terms, such as:
- Lower interest rates. Older consumers with higher scores are more likely to qualify for lower rates on credit cards and loans. This means their monthly payments may be lower, and they could pay less on their loans over time.
- Higher credit limits. Older consumers may also get access to more credit than younger consumers. If the initial limit on a credit card is $5,000 instead of just $3,000, they have more flexibility to spend as they need and keep their credit utilization lower, too.
What should my credit score be at 40?
Your credit score should be at whatever it needs to be to access the credit offers you want. For some, this is the average (709), which falls into the "good credit" range. For others, it may require a higher score to get into the "very good credit" range. Different lenders set different requirements for who they approve for offers and what credit limits or rates they extend. You may have to shop around to find competing offers from lenders and get the one that works for you.
How rare is an 800 credit score for a 40-year-old?
Since the average credit score for this age group is 709, it is not common for a 40-year-old to have an 800 credit score. It's a full 91 points above the average and out of reach for most.
Fortunately, you don't need an 800 credit score to access lower rates and better credit offers. That's because lenders often look at the general category your credit score falls in, such as:
- Poor credit: 300 to 579
- Fair credit: 580 to 669
- Good credit: 670 to 739
- Very good credit: 740 to 799
- Excellent credit: 800 to 850
If your score is around a 739 (good credit rating), and you don't get the credit offers you want, it may only take a small change to bump it one point and into the next category of "very good." Trying to hit that 799 score at all may not be necessary.
In fact, anything above 720 is considered "super-prime" and may be all that you need to access the best rates for your income and area of the country.
Lenders offer some nice, low-rate offers to consumers with very good credit. You may not find you need an 800 credit score to get the kinds of loans you need for a home, car, or tuition.
How much credit should a 40-year-old have?
There's no set amount of credit recommended for all consumers in their 40s. That's because each individual will have their own goals, income, and financial responsibilities. For example, a 40-year-old who wants to buy a home and car may need access to an extensive amount of credit through mortgages and personal loans. Someone who already owns their car and rents an apartment may not need anything near this. A credit card line or two may be enough.
However, even if you don't need credit right now, it's still a good idea to qualify for it. Having a good enough credit score to buy a house may come in handy later, even if you don't plan on buying a home in the near future.
Ways to improve your credit in your 40s
Whether you've reached the age of 40 or are planning for the future, one thing is true: the rules for building credit don't change as you get older. These actions can keep your score healthy and give you access to the rates and credit offers you need for this next season in life:
- Monitor and maintain credit reports. Regularly check for errors and ensure all information is accurate. If you see something incorrect, contact the credit bureau directly.
- Follow a budget. By spending less than you earn, you're less likely to reach for a credit card every time you need to buy something. A lower credit utilization can have a big impact on your credit score.
- Pay bills on time. Late payments can quickly tank your score, so watch for your due dates every month and set up automatic payments if necessary.
It's never too late to work on your score, and people in their 40s often find it's a good time to improve their money habits. Even small score changes matter to lenders. Then, when it comes time to get a loan or new credit accounts, you could be more likely to be approved for the credit programs that fit your budget and needs.
