Consumer Comeback Blog

Experian Study Illustrates Debt, Credit Scores Through the Generations

With age, comes wisdom – ideally the wisdom to manage your personal finances. Regardless of age, the majority of Americans still carry debt. According to a recent Experian study, the average debt in the United States is $78,030.

The study explores the debts and credit scores of four generational age groups including Greatest Generation (ages 66-plus), baby boomers (ages 47 to 65), Generation X (ages 30 to 46) and Generation Y (ages 19 to 29). Common sense would dictate that older generations would have longer to establish credit and improve their credit scores, but on the other hand, they have also had longer to accrue debt.

Each generation’s largest debt contributor is the first mortgage. Baby Boomers and members of Generation X were comparable in both debt and credit scores with less than $10,000 difference between their amounts of average debt, and only 64 point difference in credit scores. Boomers reported an average debt of $101,951, and 782 credit scores. Boomers are likely carrying both a first and second mortgage, bank issued credit cards, and auto loans. Gen X has the highest amount of debt of the four generations at $111,121, and an average credit score of 718 because they not only carry mortgages, but credit cards, auto loans, and student debt. Generation X carries 5% higher first mortgage debt than the national average of 72.6%.

Generation Y, still in their 20s, has the lowest amount of debt of the four generations at $34,765, perhaps because are still building credit with student and auto loans. The Greatest Generation has the second lowest debt at $38,043 and the highest credit scores with 829 after either paying off mortgages by now, or having downsized to smaller residences or assisted living facilities. However, the Greatest Generation has the highest percentage of bank-issued credit card use.

“For all consumers, establishing and maintaining a positive credit history is an important step in achieving financial goals,” said Maxine Sweet, Experian vice president Consumer Education, said in a press release. “At any age, paying bills on time is the single most important contributor to good credit.”

Check out Experian’s infographic that explains debt and credit scores by generation.