Millions of Americans have sought to reduce their debt obligations as they faced the reality of dealing with these balances in the wake of the financial crisis. However, one age group has defied that trend in the last few years.
Borrowers aged 60 years old and up saw their average outstanding debt across all types of accounts increase slightly between October 2009 and the same month three years later, according to new data from credit scoring company FICO’s Banking Analytics Blog. Despite the changes, though, they typically have far less debt than most other age groups.
Consumers from 18 to 29, 30 to 39, 40 to 49, and 50 to 59 all saw their debts tumble during the same period, especially among those in the second of these age groups, the report said. In fact, for those in their 30s, as well as consumers 18 to 29, debt now stands slightly lower than the levels observed in October 2005, well before the financial crisis began to take hold. Meanwhile, people age 40 and up tend to have more debt than they did prior to the onset of the downturn in early 2007.
Perhaps as a result, the proportion of younger people with higher credit scores grew over the seven-year period examined, the report said. Through October 2012, slightly more than a third of all consumers who had credit ratings of 760 or more, up from 32.2 percent three years earlier, and 29.6 percent in 2005.
Meanwhile, that has likewise led to a decline in people in their 40s and up having their scores fall into the same category, the report said. Between 2009 and 2012, the percentage of people in their 40s, 50s, 60s and up who had scores of 760 or better all declined, and those in the oldest group saw the most appreciable drop; in 2005, 55.4 percent of those with the top-flight credit ratings were in the oldest age group, but that number dwindled to just 51.6 percent in the most recent year examined.
People age 60 and up tend to have significantly less debt in general, largely because they have successfully paid off their mortgages and auto loans, or other lines of credit, that younger consumers tend to carry for years or even decades.