The average U.S. FICO score hit a record high of 703 in 2019, driven by Americans in their 30s, as a strong labor market helped people to pay their bills on time.
The share of Americans with FICO scores above 700 rose to 59%, the largest ever, Experian said in a report on Thursday.
The improvement was driven by Millennials getting their financial lives in order as the oldest members of the cohort approach the age of 40.
“Millennials, ages 24 to 39 in 2020, now outnumber Baby Boomers and are finally hitting their credit stride,” the Experian report said. “Their economic emergence is reflected by a 25-point increase in their average FICO score since 2012 – the biggest increase of any generation.”
The average age Americans achieved a FICO Score of 700 was the youngest ever: 54. Nine years ago, the average age was 62, the report said. Scores above 700 “are considered the marker of good credit by many lenders,” the report said.
About 1.2% of Americans had a perfect FICO score of 850, the report said. The number of people with an 850 score has grown 63% in 10 years, Experian said.
“Americans are making better credit decisions,” said Shannon Lois, Experian’s head of analytics, consulting and operations. “Which is an indication of consumers being more educated about their credit.”
The strongest labor market in decades has also been a factor, the report said. The U.S. unemployment rate touched a 50-year low of 3.5% three times since September. In January, the rate was 3.6%, according to the Bureau of Labor Statistics.
While jobs have been plentiful, wage growth has been stagnant. The median household income was $65,666 in December, according to a Feb. 6 report by Sentier Research. Adjusted for inflation, that’s a gain of just 1.1% from a year earlier, the report said.