It seems everyone was racking up debt before the 2007 recession hit. But once the economy tanked, consumers started paying it down. That is, except those who are ages 60 and up, according to FICO, the credit score company.
In fact, consumers in that age group saw the steepest decline in credit scores. Back in 2005, 55.4 percent of consumers older than 60 had healthy FICO scores of 760 or higher. That dropped to 51.6 percent last year.
Debt is a factor in credit scores. FICO found that debt among those 60 and older rose from $49,330 to $55,200 in the five years after October 2007, a nearly 12 percent increase.
FICO cites the reasons behind this:
- Older workers who lost jobs didn't find new gigs quickly and relied more on credit cards to tide themselves over.
- Many older workers, too, were forced into early retirement before they had adequately built up a nest egg. Again, credit cards came to the rescue.
- Older consumers took advantage of low interest rates, borrowing more for cars and houses.
- And older adults added to their student loan debt, either borrowing to get retraining for themselves or co-signing a loan for a younger student.
In comparison, younger consumers decreased their credit card debt, and 18- to 29-year-olds improved their credit scores.