While many families across the country grapple with high prices and a tight job market, a recent FICO report highlights a surprising bright spot for younger borrowers. 18‑ to 29‑year‑olds have raised their average credit score by 17 points since 2019, the largest increase among all age groups measured.
Local perspective from Nashville
Kelly Klein, a 31‑year‑old loan officer at a community development financial institution in Nashville, Tennessee, illustrates the trend. After graduating with $100,000 in student loans, Klein devoted every commission check for six years to debt repayment. Today she is debt‑free, has a robust retirement account, and enjoys a “pristine” credit score.
Klein says she learned much of her financial knowledge from free webinars, social‑media experts, and tax‑strategy resources that were once hard to access, especially for women. “We have a lot more knowledge than previous generations did,” she said.
Why Gen Z scores are climbing
FICO attributes the gains to several factors. First, many young borrowers began their credit journeys during the pandemic when student‑loan payments were paused, giving them time to build payment histories without the pressure of immediate debt service.
Second, financial‑literacy resources have become more widely available. “Gen Z is pretty savvy about credit and more aware of scores because they’ve faced many economic headwinds,” said Matt Schulz, chief credit analyst at LendingTree.
Third, younger borrowers often start with modest credit lines, allowing room for rapid improvement as they demonstrate on‑time payments. As they transition from credit cards and student loans to auto loans and mortgages, responsible handling of new accounts further boosts scores.
Numbers that matter
According to FICO, nearly half (49.6%) of borrowers aged 18‑29 now have a strong credit score of 700 or above, up from 41.4% in April 2020. The overall average FICO score for this cohort rose by one point between April 2025 and April 2026, even as scores for older age groups slipped slightly.
However, the distribution is becoming more polarized. While many young adults enjoy high scores, a growing segment sees lower numbers, reflecting a K‑shaped recovery. “There’s a lot of fragmentation among Gen Z. Many are thriving, some are struggling and rely on parental support,” said Tommy Lee, senior director at FICO.
Challenges remain
Housing costs continue to pressure younger families. The average monthly mortgage payment for a first‑time homebuyer is 57% higher than in 2019, making homeownership less attainable.
Student‑loan repayment resumption also poses a risk. FICO reports that 3.2 million borrowers with active student‑loan payments had a delinquency reported in the prior six months, and those delinquencies dropped average scores by 38 points. Conversely, borrowers who resolved delinquencies saw scores rise by an average of 16 points.
Schulz warns that a single late payment—30 days or more—can cause lasting damage, especially when applying for a mortgage.
What this means for families
For parents guiding their children’s financial futures, the data underscores the importance of early credit education and monitoring. Teaching teens about on‑time payments, responsible credit‑card use, and the impact of debt can help them avoid the pitfalls that still affect many peers.
Overall, the upward trend in Gen Z credit scores offers a hopeful sign that financial literacy and disciplined borrowing can offset broader economic challenges.
Original reporting: KTVZ (Central Oregon) — read the source article.
