Gen Z's credit scores are dropping. Here's what to do if yours is too

Core Insights - Gen Z has experienced the largest decline in credit scores among all age groups over the past year, primarily due to student loan debt [1][2][5] - The national average credit score has decreased by two points to 715, while Gen Z's average score has dropped three points to 676 [1][2] Credit Score Context - A credit score, which ranges from 300 to 850, is a mathematical formula used by lenders to assess the likelihood of loan repayment [2] - 34% of Gen Z consumers have open student loans, significantly higher than the 17% of the total population [2] Economic Factors - The U.S. Department of Education paused federal student loan payments in March 2020 due to the pandemic, with a grace period extending until October 2024 [3] - The Trump administration has restarted the collection process for outstanding student loans, affecting approximately 5.3 million borrowers in default [4] Challenges for Young Consumers - Young consumers face difficulties in making timely payments due to student loans, a challenging job market, and high inflation [5] - A low credit score complicates access to various financial services, including car loans, mortgages, and insurance [5] Potential for Improvement - Despite the challenges, younger consumers have the most potential for credit score improvement [6] - Experts recommend that individuals should regularly check their credit scores to better understand their financial standing and take necessary actions [6][7]