Age matters when it comes to your credit score

Posted in 'Credit Score' by Barry Stamp

02 December 2011

Credit Action, the National Money Education Charity scares everyone witless every month with statistics including the fact that a property is repossessed every 14.28 minutes, that every 4.35 minutes someone is declared insolvent, and that the Citizens’ Advice Bureau deal with 8,910 new cases every day. In their December statistics the charity sadvise that average household debt is a mere £7,984 excluding mortgages, which is lower this month than last.

Averages conceal an awful lot though, because most credit-active people are men in the 25-34 age group, and many in this band would be overjoyed to have personal debt at such a low level. The hard fact is that education costs tend to burden all people in their 20’s, and for many it is impossible to save, because debt has to be serviced, until well into their 40’s.

This is well known by those who build credit scorecards. Age is one of the most predictive ‘characteristics’ of bad debt. It’s not as if the relationship is all nice and straight line, either, as once teenagers appear within a family unit, the pressure on income becomes very obvious, so there is a dip in ‘creditworthiness’ in the mid 40’s to 50’s too.

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