Young Americans are quietly outperforming expectations in one major area of their finances: credit. Gen Z scores have climbed substantially since before the pandemic, giving younger borrowers stronger credit profiles at a time when housing, debt, and everyday expenses are becoming increasingly difficult to manage.
According to FICO’s Fall 2026 Credit Insights report, average credit scores among Americans ages 18 to 29 have risen 17 points since April 2019, the largest improvement of any age group measured. Millennials between 30 and 44 posted the second biggest gain at 10 points. FICO said the overall U.S. average score stood at 714 in April 2026.
That improvement is significant because young borrowers are building credit in an economy where debt remains enormous. According to the Federal Reserve Bank of New York, total U.S. household debt stood at about $18.77 trillion at the end of the second quarter of 2026. Student loan balances were roughly $1.65 trillion, while credit card balances reached approximately $1.26 trillion.
For some young adults, the progress has been dramatic. CNN profiled Kelly Klein, a 31-year-old Nashville loan officer who graduated from college carrying $100,000 in student loans.
“I expected I’d never pay off my student debt,” Klein said.
Instead, CNN reported that Klein eliminated the debt over the following decade while building her retirement savings and strengthening her credit.
“Every commission check I earned for the first six years went to paying off my debt. Every single penny,” Klein said.
Part of the reason Gen Z scores have improved comes down to timing. CNN reported, citing FICO research, that much of the increase happened during the early stages of the pandemic, when federal student loan payments were paused. Younger consumers also entered that period with shorter credit histories, leaving more room for their scores to rise as they established records of making payments and managing different forms of credit.
Matt Schulz, chief credit analyst at LendingTree, told CNN that younger consumers may also be more intentional about understanding the system.
“Gen Z is pretty savvy about credit. And they are more aware of credit scores, in part because there have been so many economic headwinds during their lives,” Schulz said.
There is evidence that financial education has become a bigger priority for younger adults. In separate FICO research on financial literacy, 60 percent of Gen Z respondents identified understanding credit scores as one of the most important financial skills. At the same time, 28 percent said they did not feel in control of their credit score, suggesting that greater awareness does not necessarily mean younger adults have mastered every part of their finances.
Klein credited wider access to financial information, including education available online, with helping her understand investing, brokerage accounts, taxes, and credit card rewards.
“We have a lot more knowledge than previous generations did. A lot of it was gate-kept, especially from women, and tailored toward men. Luckily, I feel like financial education is more available,” she said.
Building a credit history also rewards time and consistency. FICO does not use a person’s age itself to calculate a score, but the scoring process considers factors tied to a borrower’s history and payment behavior. Schulz explained the process to CNN by comparing credit responsibility to gaining a parent’s trust with a car.
“The first few times they might put some real restrictions on you. But if you show you can handle it over time, they might not think at all about letting you borrow the car. Credit is very similar,” Schulz said. “Having time and experience handling credit responsibly leads to credit scores being higher.”
The headline numbers, however, only tell part of the story.
CNN reported that 49.6 percent of borrowers ages 18 to 29 had a FICO score of at least 700 as of April 2026, up from 41.4 percent in April 2020. But FICO also found that scores among younger consumers are becoming more polarized. Instead of everyone moving upward together, the distribution has shifted toward both stronger and weaker credit profiles, “rather than clustering in the middle.”
“There’s a lot of fragmentation among Gen Z. Many of them are thriving. Some are struggling and relying on support from parents. We’re definitely seeing a K-shaped economy,” said Tommy Lee, senior director at FICO.
FICO’s broader findings reinforce that divide. Its 2026 research found that 74 percent of Gen Z respondents receive some form of ongoing financial support from others. Among Gen Z homeowners, 68 percent said housing expenses have made keeping up with other costs more difficult.
Housing may be where better Gen Z scores run into their biggest real-world obstacle. According to FICO, the average monthly mortgage payment for a first-time homebuyer reached $2,563 in April 2026. That represents a 57 percent increase since 2019, far ahead of the roughly 30 percent cumulative inflation FICO calculated over the same period.
In other words, having better credit can help a young buyer qualify for financing or secure better borrowing terms, but it cannot erase the impact of higher home prices and financing costs.
Student debt presents another risk. FICO reported that approximately 3.2 million borrowers with student loan payments due had a recent delinquency. Those borrowers experienced an average 38-point decline in their FICO scores over the previous year. Borrowers who stayed current gained an average of six points, while borrowers without a recent delinquency gained 16 points.
The New York Fed has documented the broader strain as student loan reporting normalized following the pandemic pause. Its first quarter 2026 data showed 10.3 percent of student loan balances were at least 90 days delinquent, even as the pace at which borrowers were newly entering serious delinquency slowed from late 2025.
That makes missed payments especially important for young adults who have spent years building their credit.
“It really only takes one payment 30 days or more late to really do damage to your credit score,” Schulz said.
There are also signs that strong Gen Z scores should not be confused with universally comfortable finances. A March 2026 LendingTree survey found 58 percent of Gen Z credit card holders said they typically made only the minimum payment on at least one card, the highest percentage among the generations surveyed.
That contradiction may be the most important part of the Gen Z credit story. Younger Americans have learned how to build credit faster than previous data might have suggested, and millions are successfully protecting their scores despite a difficult economic environment. But a 700 credit score is not the same thing as financial security. Student debt, expensive housing, family dependence, and growing borrowing costs are creating two very different financial realities within the same generation.
Gen Z scores may be stronger than they were before COVID, but the growing gap between young Americans who can turn good credit into wealth and those using credit simply to stay afloat could matter far more than the average score.
