According to FICO, Generation Z’s credit score has risen by 17 points since 2019. The increase among this group, which FICO defines as people aged 18 to 29, surpassed the 4-point rise among boomers and the Silent Generation. The median credit score in the US remained unchanged at 744.
FICO stated that unchanged rates of on-time credit payments did not mean consumers were not experiencing financial pressure. While housing and vehicle payments rose faster than inflation, bank-card and personal-loan balances continued to increase. According to research by Fidelity, Generation Z’s contributions to individual retirement accounts rose by 65% in one year; data from Bank of America and Harris Poll also showed that this generation had cut back on social spending.
Why it matters
The data show that the improvement in credit scores cannot be interpreted as meaning that Generation Z has become financially more comfortable. This distinction is important for lenders as well as for young consumers facing housing, vehicle and personal-loan payments, because the rise in scores alone does not reflect the pressure created by borrowing costs and recurring expenses. Larger contributions to retirement accounts and reduced social spending suggest that the generation is tightening its day-to-day budget while also turning toward long-term savings. The open question is to what extent rising credit scores can be sustained in the face of increasing balances and inflation’s impact on essential payments.