Mortgage Credit: Older Applicants Tend to Have Higher Scores

The “older the better” saying seems to apply to new mortgage applicants as Millennials have the lowest credit scores when compared with older cohorts, according to CoreLogic.

The average credit score for Millennials applying for a mortgage loan in the last three months (March, April, and May) was 730, compared to 738 for Generation Xers, 753 for Baby Boomers, and 770 for the Silent Generation.
Of course, Millennials have less time to build their credit history, so their at a disadvantage.
Nonetheless, Millennials taking on homeownership have the highest loan-to-value (LTV) ratios and debt-payment-to-income (DTI) ratios, CoreLogic found. The average LTV ratio for Millennials applying for a mortgage loan in the last three months was 89 percent, compared to 81 percent for Generation Xers, 73 percent for Baby Boomers, and 68 percent for members of the Silent Generation (those generally 71 to 88 years of age).
Despite the lower credit scores, workers who are early in their professional careers, such as Millennials, commonly see more rapid earnings growth than older workers.
“And more rapid income growth than retired individuals,” writes CoreLogic. “While their credit-risk attributes may look weaker than for older cohorts, this potential for faster earnings growth and more savings accumulation are important offsets in their risk profile.”

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