Younger Americans are proving surprisingly resilient with their finances, even as economic pressures weigh on households nationwide. New data from FICO shows that Americans aged 18 to 29 now carry higher average credit scores than they did before the Covid-19 pandemic — a 17-point jump that outpaces every other age group tracked.
A Generation Built Different Financial Habits
The gains largely trace back to the early pandemic period, when paused student loan payments gave young borrowers breathing room to stabilize their finances. But the shift goes deeper than a temporary pause. Matt Schulz, chief credit analyst at LendingTree, points to a generational shift in financial literacy, noting that younger consumers have grown more attuned to credit management amid repeated economic disruptions throughout their adult lives.
As of April, nearly half of borrowers in this age bracket held a strong credit score of 700 or above, up from 41.4% in April 2020. Younger borrowers also benefit from being early in their credit histories, giving them more room to build strong track records as they take on car loans, mortgages, and other forms of credit.
Cracks Beneath the Surface
The improvement isn’t uniform. FICO’s research shows the score distribution among 18-to-29-year-olds has spread toward both extremes — higher scores are climbing, but so are lower ones. Tommy Lee, senior director at FICO, points to a widening divide within the generation itself, with many thriving financially while others lean on family support to get by.
Rising housing costs remain a persistent headwind. According to FICO, the average monthly mortgage payment for first-time buyers now sits 57% higher than in 2019. Meanwhile, the return of student loan payments has created new strain: roughly 3.2 million borrowers nationwide recently fell behind, seeing their credit scores drop by an average of 38 points as a result. On the flip side, FICO found that 4.9 million borrowers who resolved a delinquency or entered a new repayment plan saw their scores climb by an average of 16 points — a sign that recovery is possible once payments get back on track.
What’s Next
As student debt repayment fully normalizes, the gap between financially stable and struggling young borrowers may keep widening rather than closing. For now, though, the broader trend marks a notable bright spot in an otherwise uneven economic picture — one GrowBusinessMag will continue tracking as new generational financial data emerges.
