New York (CNN) — Kelly Klein graduated from college with $100,000 in student loans that she feared would haunt her forever.
“I expected I’d never pay off my student debt,” said Klein, who is 31 years old.
But flash forward 10 years and Klein is now debt-free, her retirement account is flush and her credit score is pristine.
“Every commission check I earned for the first six years went to paying off my debt. Every single penny,” said Klein, who is based in Nashville, Tennessee, and works as a loan officer at a community development financial institution.
While millions of Americans are hurting from high prices and low hiring, new research suggests the finances of younger generations are displaying surprising resilience.
Americans between the ages of 18 and 29 have higher credit scores today than they did just before Covid-19, according to FICO research shared first with CNN.
Not only that, but that youngest generation’s 17-point increase in average credit scores since 2019 is the biggest among any age group FICO measured. The second biggest increase in credit scores over that timeframe was for the 30-to-44 cohort, otherwise known as Millennials.
Most of the gains occurred during the initial stages of the health emergency when student loan payments were paused.
Experts say younger Americans have benefited from access to better education about the importance of protecting credit scores to hold down payments later in life.
“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,” said Matt Schulz, chief credit analyst at LendingTree.
‘A lot more knowledge’
Overall FICO scores fell slightly between April 2025 and April 2026. However, credit scores for Gen Z are up by one point over that timeframe and roughly half have a very strong FICO score of 700 or above.
Klein, who is a Millennial, said she learned valuable lessons about finance and investing from experts on social media. Klein also said she joined a free webinar on opening a brokerage account and familiarized herself with tax strategies and how to maximize 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.
Another factor: Younger borrowers are at or near the beginning of their credit journeys, giving them the most room to grow their credit scores. FICO said it doesn’t take into consideration age when scoring borrowers, but it does evaluate how long someone has been able to successfully make payments on time.
As consumers take on different kinds of debt — moving from just credit cards and student debt to car loans and mortgages — they open themselves up to being better borrowers. That’s a key factor in determining credit scores.
Schulz compared younger Americans increasing their credit scores with a new driver borrowing Mom or Dad’s 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.”
K-shaped economy is evident
More emphasis on being responsible borrowers may help explain why, at a high level, average credit scores for younger Americans have held up better than might be expected in today’s economic environment, where high-income earners have seen their wealth grow faster than low-income earners.
As of April, nearly half (49.6%) of borrowers aged 18-29 had a strong credit score of 700 or above, according to FICO. That’s up from 41.4% in April 2020.
However, there are disparities beneath the surface that underscore the K-shaped economy.
For instance, FICO said the score distribution for 18-29 year olds has shifted toward both higher and lower scores “rather than clustering in the middle.”
In other words, high credit scores today for young people are higher than in 2019 — but so are low ones.
“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.
3.2 million borrowers are behind on student debt
One pressure facing younger Americans is the spike in housing costs driven by elevated mortgage rates and record-high home prices.
The average monthly mortgage payment for a first-time homebuyer is 57% higher than in 2019, according to FICO.
Another arguably bigger factor is the return of student debt payments and credit bureau reporting after a Covid-era pause.
As of April, about 3.2 million Americans of all ages with a student loan payment due (or 14%) had a recent delinquency (30 days or more past due) reported in the prior six months, according to FICO.
Those borrowers who fell behind on their student loans and were deemed delinquent saw their FICO score decline by an average of 38 points.
By contrast, another 4.9 million borrowers either resolved a delinquency or moved into another repayment status, such as starting a repayment plan. Those consumers experienced an average credit score increase of 16 points, according to FICO.
Schulz, the LendingTree expert, stressed that missed payments carry severe consequences that can haunt borrowers for many years — especially when they need to get a mortgage.
“It really only takes one payment 30 days or more late to really do damage to your credit score,” he said.
The-CNN-Wire
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