Effective strategies to raise your credit score, according to experts
According to FICO data, Generation Z has decreased its credit score to the lowest levels since 2020
According to a recent FICO report, since last year, Americans' credit scores have fallen to their lowest levels among the younger generation.
According to the report, Generation Z decreased their credit score below 700 since the end of 2024, this has been recorded as the lowest year-over-year drop since 2020.
Credit Scores are important because they determine your ability to pay your bills. Payment and credit history, amounts owed, and other factors are analyzed to decide whether or not to grant the borrower a loan or credit card.
In its analysis, FICO highlights that Generation Z borrowers have struggled to maintain a high credit score, primarily due to their student loan debt. Data indicates that nearly 14% saw their scores drop by as much as 50% last year alone.
However, there are some strategies that could help this generation raise their credit scores. "Younger consumers typically have the largest average year-over-year increase in their score because they are the group with the lowest scores. With proper credit management, they could easily experience a similar increase, FICO indicates.
How to improve your credit score?
The first step is to make payments on your debts on time, in this case you could consider scheduling automatic payments. It is important to know that doubtful or late payments can remain on your credit score for up to seven years.
The second piece of advice credit experts give is to limit opening new accounts. While opening bank accounts helps build credit history, it can also be counterintuitive and affect your score if done excessively.
One of the most important goals if you are looking to improve your credit score is to keep your credit utilization in the mid-to-low range, but not reaching zero; platforms offering these reports such as AnnualCreditReport.com, TransUnion, Equifax, or Experian.
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