Though Individuals’ common credit score scores recently dropped for the primary time in a decade, many look like sustaining a comparatively wholesome rating.

The common credit score rating dipped by one level, from 718 to 717, in line with FICO’s March 6 blog post. Your FICO and VantageScore credit score rating can fall wherever between 300 and 850, and a 717 rating is taken into account to be “very good,” in line with the VantageScore mannequin.

Listed below are VantageScore’s rankings and ranges:

Very Poor: 300 to 499
Poor: 500 to 600
Good: 601 to 660
Very Good: 661 to 780
Distinctive: 781 to 850

Whenever you break down the typical credit score rating by age, most Individuals seem to have an excellent rating as properly.

Here is the typical credit score rating by era as of March 2024, per VantageScore CreditGauge information shared with CNBC Make It:

Gen Z (18 to 27): 665
Millennials (28 to 43): 687
Gen X (44 to 59): 710
Child boomers (60 to 78): 746
Silent era (79 to 96): 750

Many components are used to calculate your credit score rating, together with your cost historical past, the quantities you owe, your credit score combine and the way usually you have just lately opened a brand new line of credit score. It is comprehensible that older generations are inclined to have greater scores since they’ve had an extended time to ascertain and keep their credit score.

Nonetheless, Era Z and millennials usually tend to transfer as much as the next credit score tier at a quicker price than older generations, in line with OpenLending and TransUnion’s “Financing the Future” report.

The way to take your credit score rating to the following degree

In terms of boosting your credit score rating, professional recommendation is fairly simple: Do your greatest to pay down your debt.

“The best way to improve your credit score in both the long and short run is to pay down your loan balances,” Matt Schulz, chief credit score analyst at LendingTree, tells CNBC Make It. “That can obviously be easier said than done, but it should always be the goal.”

One other manner to assist your rating transfer up is to ask your lender to extend your credit score restrict, which helps enhance your credit score utilization ratio, Schulz says. Your credit score utilization price is the quantity of your complete accessible credit score that you just’re utilizing.

For instance, when you’ve got one bank card with a $4,000 restrict and also you’re carrying a steadiness of $1,000, your credit score utilization can be 25%. In case your lender will increase your restrict to $6,000, it might decrease your credit score utilization to round 16%.

In case your credit score utilization rises above 30%, it may begin to negatively affect your rating, in line with Experian.

Nonetheless, in case your request to extend your credit score restrict is granted, it is necessary to not spend as much as that new restrict, “otherwise you’ll be digging your hole even deeper,” Schulz says.

In the end, sustaining a wholesome credit score rating comes right down to consistency.

“It is about paying your bills on time every single time, keeping your balances as low as possible and not applying for too much credit too often,” he says. “If you do these things consistently for years, your credit is going to be just fine.”