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The amount you’ll end up paying in income taxes doesn’t have to remain a mystery until you complete your federal return.

With a fundamental understanding of how taxes work and some basic information about your household, you may be able to estimate what your tax liability or refund will be. And with that knowledge, you can better plan your finances for 2025 and 2026.

Read on for a look at what your 2025 taxes might look like, and how your income, filing status, and other factors can impact your bottom line.

What Is an Income Tax Calculator?

A federal tax calculator for 2025 can help you estimate the federal tax you may owe on the income you earn this year. It isn’t meant to replace the tax service or software you usually use to complete your return. But it could help you plan ahead and make informed choices as you prepare for a potential tax bill, or refund, when you file in 2026.

Historical Tax Rates, Compared

Most people think taxes are too high now, but they could be — and have been — much higher. In 2025, the top tax rate is 37% for individuals whose taxable income is over $626,350 ($751,600 for married couples filing jointly). But in 1944, the highest rate — for anyone who made over $200,000 — was 94%. It wasn’t until 1987 that the top rate dropped below 40%.

The current rates, dictated by the Tax Cuts and Jobs Act of 2017, are set to end on December 31, 2025. It’s up to lawmakers to decide if those rates will be extended into 2026 and beyond. The tax code, officially called the Internal Revenue Code, is interpreted and implemented by the U.S. Treasury Department and the Internal Revenue Service (IRS), but tax laws are written by Congress.

How Is the Tax Rate Decided?

Currently, there are seven federal income tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The more taxable income you have, the more you can expect to pay.

That’s because in the U.S., income tax rates are graduated, which means each of these progressively higher tax rates is assigned to a specific income range, rather than a household’s entire taxable income. Each time your taxable income reaches a new level, you’ll pay a higher rate, but only on the portion that’s in that range.

The ranges, or brackets, differ depending on a taxpayer’s filing status (single, married filing jointly, married filing separately, or head of household), as seen in the table below.

Income Tax Rates and Brackets for 2025 Tax Year

If you’re a single filer with $60,000 in taxable income in 2025, for example, you won’t pay your highest tax rate (22%) on that entire amount. You’ll pay 10% on up to $11,925 of your taxable income; 12% on the amount between $11,926 and $48,475 ($36,550); and 22% on the amount between $48,476 and your taxable income of $60,000 ($11,525).

Recommended: How Much Do You Have to Make to File Taxes?

How to Calculate Federal Taxes in 2025-2026

Determining your income tax each year is, of course, much more complicated than simply applying the various tax rates to the money you’ve earned.

Depending on the complexity of your return, it may take several calculations to come up with the final amount you owe — or what you’ve overpaid and can expect to be refunded. Whether you’re filing taxes for the first time or you’ve been paying income taxes for years, here’s a quick summary of the basic steps that may go into figuring out your federal taxes in 2025-26:

1. Calculate Your Gross Income

This is the total of all the money you made for the year. Think income from your job, including tips; business income; dividend and interest income; etc.

2. Determine Your Adjusted Gross Income (AGI)

Once you know your gross income, you can subtract certain adjustments, such as alimony payments, student loan interest, health insurance premiums (if you’re self-employed), some retirement contributions, and more to determine your AGI.

3. Subtract Applicable Deductions

A tax deduction is an amount you can subtract from your AGI to further reduce your income and lower your tax. You can either choose to list, or itemize, all the tax deductions that apply to you, or you can take the standard deduction. Most taxpayers go with the standard deduction, which for tax year 2025 is:

•   $15,000 for single filers and married individuals filing separately;

•   $22,500 for heads of households; and

•   $30,000 for married couples who file jointly.

However, you may want to run the numbers to see if it makes sense to go with itemized deductions. Some common deductions that must be itemized but could help further reduce your tax burden include mortgage interest, charitable contributions, and medical and dental expenses. But there are many more options to choose from.

4. Apply the Appropriate Tax Rates from the Table

Once you’ve calculated your taxable income, you can apply the 2025 tax rates. Remember, your entire taxable income won’t be taxed at the same rate; the tax rate goes up at various levels, or brackets.

5. Use Any Applicable Tax Credits

Unlike tax deductions, which reduce how much of your income is subject to taxes, tax credits directly reduce dollar-for-dollar the amount of tax you owe. When you’re preparing for tax season, your tax professional or tax software can help you find your applicable tax credits.

Some common credits include the Child Tax Credit, education credits, the Saver’s Credit for retirement savings contributions, and the premium tax credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the federal marketplace.

6. Don’t Forget What You’ve Already Paid

Keep in mind that you’ve likely had money withheld from your paychecks throughout the year to put toward your federal income tax. Or, if you’re self-employed, you may have been making quarterly estimated tax payments. Once you know what you owe (after applying tax credits), you can subtract what you’ve already paid to get a final tax amount. If the number is positive, you can expect to owe the IRS. If it’s negative, and your calculations are correct, you can expect to get a refund.

How Much Does the Average American Pay in Taxes?

A Tax Foundation analysis of the most recent available data from the IRS (2022) found that the average tax rate for all U.S. taxpayers was 14.5%, and the average amount of income taxes paid was $13,890. The highest-earning Americans paid an effective average tax rate of 26%, while the bottom 40% paid about 4% of their income to the IRS.

Of course, there are other types of taxes you may also have to pay, including sales tax, property tax, state and local taxes, estate tax, and more. And this means taxes can eat up a hefty portion of your hard-earned money.

Need help managing your finances? A money tracker can help you keep tabs on where your money is coming and going.

Example Tax Scenarios

Your federal income tax bill each year will depend on several factors, including your gross income, your filing status, the deductions and credits you can use to lower the amount you owe, and what you’ve already paid during the year. Here are two basic examples of how taxes might be calculated in 2025 for a single filer with a salary of $80,000 and a married couple with a gross household income of $120,000.

Joe, the Single Filer

Joe has a salary of $80,000 in 2025, so his gross income is $80,000.

He decides to go with the standard deduction in 2025, which is $15,000 for a single filer. This brings his taxable income to $65,000.

Joe then uses the applicable tax brackets.

•   The first layer of Joe’s taxable income, up to $11,925, is taxed at 10%, which comes to $1,192.50.

•   The next layer of Joe’s taxable income, from $11,926 to $48,475, is taxed at 12%, which comes to $4,386.

•   The next layer of Joe’s taxable income, from $48,476 to $65,000 is taxed at 22%, which comes to $3,635.50.

Joe would have a total federal income tax of $9,214.

Joe finds a couple of credits he can apply that take another $1,000 off of his tax bill. And he figures out that he will have paid $7,000 in federal income tax withholding for the year.

Joe estimates that he’ll owe $1,214 when he files his taxes 2026, and he’s building that into his budget so that he’s prepared when it’s time to pay. (Tip: An online budget planner can take the guesswork out of budgeting.)

Mary and Sam, Married Filing Jointly

Mary and Sam’s combined salaries in 2025 equal $120,000, so their gross income is $120,000.

They don’t have any kids yet, and they haven’t yet purchased a house. So, they decide to use the standard deduction in 2025, which is $30,000. This brings their taxable income to $90,000.

According to the applicable tax brackets:

•   The first layer of their taxable income, up to $23,850, is taxed at 10%, which comes to $2,385.

•   The next layer of their taxable income, from $23,851 to $96,950, is taxed at 12%, which comes to $7,938.

Mary and Sam would have a total federal income tax of $10,323.

Mary and Sam think they’re eligible for $2,000 in tax credits that they can take off their tax bill. And between them they will have paid $10,000 in federal withholding in 2025.

Mary and Sam estimate that they’ll get a refund of $1,677 when they file their 2025 tax return, and they plan to put that refund toward a down payment on a house in 2026.

Recommended: What Tax Bracket Am I In?

How Federal Taxes Impact You

The U.S. tax system is the federal government’s single largest source of revenue, and compliance with federal tax laws is mandatory. The money taxes bring in is meant to finance various public services, including veterans’ benefits, Social Security, health programs, national defense, education, transportation, and more.

That said, there’s a popular quote from an old Morgan Stanley ad that says: “You must pay taxes. But there’s no law that says you gotta leave a tip.”

For high earners, especially, taxes may be one of the most significant expenses they encounter each year and over their lifetime. But all taxpayers can benefit from understanding how taxes work and from the type of proactive planning that can help them legally hold on to more of their money. Staying on top of any changes can also help you avoid common tax filing mistakes, as many deductions, credits, and income thresholds are adjusted annually for inflation.

The Takeaway

If you have an idea of how much you’ll bring in from various income streams this year, and you’re aware of some of the basic deductions and credits that might reduce the amount you’ll owe, you can use the 2025 brackets to calculate a pretty good tax estimate.

Whether you expect to pay when you file your return or you think you’ll get a refund, calculating your tax bill in advance can help you budget appropriately. And you may even find some additional savings in 2025 and beyond.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What will the tax brackets be for 2025?

The IRS has already published the 2025 tax rate table for single filers, married couples filing jointly, married couples filing separately, and heads of household. Each bracket has been adjusted slightly to reflect inflation.

How can you calculate estimated tax payments for 2025?

To calculate your estimated tax, you must figure your expected adjusted gross income, taxable income, deductions, and credits for the year.

Will tax returns be bigger in 2025?

Some taxpayers may qualify for a larger refund on their 2025 return (due in April 2026), thanks to inflation-related adjustments to the tax brackets and standard deduction amounts. Changes to the tax laws are expected to impact 2026 returns (due in April 2027), so it’s harder to predict what tax bills will look like at that time.

How much is the standard deduction for 2025?

The standard deduction amount depends on your filing status. In 2025, the standard deduction will be $15,000 for single filers and married individuals filing separately; $22,500 for heads of household; and $30,000 for married couples who file jointly.

What is the tax offset for 2025?

A taxpayer’s offset amount can vary depending on the type of debt that is owed.

What is the filing deadline for 2025 federal tax returns?

Federal income tax returns for 2025 are due on Wednesday, April 15, 2026.

Photo credit: iStock/Anastasiia Makarevich

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q225-015

A tax refund can come as welcome news when it’s time to file your return. But how much can you expect to get back each year? A tax refund calculator can help you figure that out.

Learn how a tax refund calculator works, plus what details impact whether or not you’re overpaying the federal government.

What Is a Tax Refund Calculator?

A federal tax refund calculator looks at your gross income for the year — that’s the amount you earned before any tax withholdings from your paycheck. Then it factors in deductions, including standard or itemized deductions, eligible retirement account contributions, HSA contributions, and any applicable tax credits.

Next, it applies the appropriate tax bracket to your final taxable income to determine how much you owe for the year. Finally, it will subtract any tax payments you made throughout the year, such as those through paychecks or estimated tax payments, from your owed amount. If you overpaid, you’ll be repaid the difference in the form of a tax refund.

How to Track Your Tax Refund

As you prepare for tax season, it helps to understand how long it will take to receive your refund after you file taxes. That way you can account for the funds in your online budget planner for the right time frame, rather than incorrectly assuming when you’ll have that extra cash in the bank.

You can check your federal refund through the IRS website. The information is available more quickly when you e-file your tax return. You can start tracking within 24 hours for a current tax year return or up to four days after e-filing a previous year’s return. If you file a paper return, it can take as long as four weeks to see your refund status.

When you visit the IRS website, be prepared to provide a few basic pieces of personal information: your Social Security number or individual taxpayer ID number; filing status; and the exact refund amount from your return. One of the most common tax filing mistakes is to input the wrong Social Security number, so check your return and refund request carefully before submitting.

How to Calculate Federal Tax Refunds in 2025-2026

Your actual refund amount may vary every year based on changes in your income, eligible deductions, and IRS changes to income tax rates and brackets. So only use a 2024 tax refund calculator for that year’s return, then look for a tax refund calculator for 2025 for this year.

The actual calculation depends on the complexity of your income. For instance, it’s much simpler if you only have W2 income that you’ve already paid taxes on. It can get a little more complicated if you also have things like taxable investment income and self-employment income.

Start with the IRS tax refund calculator to estimate the correct federal income tax withholding. Then you can determine whether or not you’ll get a refund based on how much you’ve already paid throughout the year.

Recommended: 13 Steps to Prepare for Tax Season

How Is the Tax Refund Determined?

The size of your tax refund is determined by the amount of taxes already withheld and the actual tax you owe. If you’ve overpaid throughout the year, the government issues a refund. This applies to several types of taxes, including income taxes and capital gains tax.

On the IRS tax refund calculator for 2024-2025, you’ll need to provide information such as:

•   Tax filing status

•   Eligible tax deductions or credits

•   Sources of income

•   Salary or wages

•   Tax withholdings

•   Estimated tax payments

Once you enter in all of the information, you’ll see your expected tax withholding, how much you will likely owe in taxes, and your projected refund.

Average American Tax Refund

Here is the average federal tax refund by year, using IRS data from late April each year.

More than 90 million taxpayers received refunds as of April 2025, for a grand total of $265.6 billion. The vast majority is refunded via direct deposit.

The average tax refund varies by location. Here’s a comparison of what the average taxpayer in each state received as a refund in 2022.

Example Tax Refund Scenarios

There are several scenarios in which your withholding total is more than you actually end up owing on your tax return. This is usually due to tax deductions and credits. Here are some examples:

•   Tax credits: There are several tax credits that can lower the amount you owe, including the child tax credit and the earned income tax credit. For instance, the child tax credit allows eligible taxpayers to deduct up to $2,000 per child who is 16 years or younger. Up to $1,700 can be taken as a refund. So for a family with two kids, that could add as much as $3,400 to your refund (if not already accounted for in your withholding).

•   Tax deductions: Some 90% of taxpayers take the standard deduction instead of itemizing eligible deductions. In 2025, the standard deduction is $15,000 for single taxpayers, and $30,000 for those who are married and filing jointly. That can greatly reduce the amount of taxable income you have — and could even drop you into a lower tax bracket.

Another example of a refund is paying taxes when you don’t actually earn enough to owe. There’s a minimum for how much you have to make to file taxes for each filing status.

How Tax Refunds Impact You

It’s usually good news to find out you’re getting a tax refund instead of owing more on your federal return, especially if you’re filing taxes for the first time or recently increased your income. However, it’s also important to consider that when you get a refund every year, you’re essentially overpaying your taxes. Instead of getting a large lump sum after filing, you could adjust your withholding to enjoy a larger paycheck each month.

When you do get a tax refund, resist the urge to immediately spend it and instead make a strategic plan for the extra funds. One potential money move to make is to pay off high-interest debt like credit card balances. A credit monitoring service can show you your current credit score and what actions can improve it. If you have a lot of outstanding revolving credit, using your tax refund to pay off a chunk could boost your score.

Recommended: 10 Personal Finance Basics

The Takeaway

A tax refund calculator can be a helpful tool in figuring out if you can expect any money back after filing your taxes. But keep in mind that you’ll need a smart financial plan anytime you get a windfall amount of cash.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

When can I expect my tax refund 2025 IRS?

Most federal tax refunds are sent within 21 calendar days of filing your return. The fastest way to get your refund is to e-file and choose direct deposit.

Will tax refunds be bigger in 2025?

You could get a bigger tax refund in 2025 if your income doesn’t increase. That’s because deductions and tax bracket incomes increase each year in order to account for inflation.

Are we getting a Child Tax Credit in 2025?

Yes, the Child Tax Credit is still in place for 2025.

Why is my refund so low in 2025?

There are a few different reasons why your refund could be low in 2025. You may not have withheld enough, or some of your deduction and credit eligibility may have changed. If you earned more for the year, you may owe more taxes on that income, resulting in a lower refund.

How long is it taking to get tax refunds in 2025 with a child?

The typical refund timeline for the IRS is 21 days or less, regardless of whether you have a child dependent.

What is the tax offset for 2025?

If you owe any money to the federal government but have a tax refund, they may withhold that money as an offset to put towards the existing debt. This can include things like past-due child support, federal agency nontax debt, and even state income tax debt.

Photo credit: iStock/urbazon

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q225-016

According to 2024 data from Experian®, the average credit score for a 24-year-old is 681. That’s one point higher than the 2023 average and is considered a “good” FICO® Score.

Here, we’ll walk you through the ins and outs of how your age can impact your credit score, how a 681 stacks up against the average score in the U.S., and ways to build your score over time.

Average Credit Score for a 24-Year-Old

As mentioned, the average credit score for a 24-year-old is 681, which the credit scoring model FICO classifies as “good.” With that score, you’re likely to qualify for an array of loans and credit cards, though you may not get the best interest rates and terms.

But take heart: Credit scores tend to increase with age. According to Experian data, the average credit score for Millennials (ages 28 to 43) is 691. Gen X (ages 44 to 59) has an average score of 709, while members of the Silent Generation (ages 79+) boast a 760 score.

What Is a Credit Score?

A credit score is a three-digit number that ranges from 300 to 850. It helps lenders and creditors gauge your creditworthiness, or the likelihood that you’ll pay back the money you borrowed. Generally speaking, the higher your score, the greater your chances of being approved for a credit card or loan.

Two common credit scoring models are FICO and VantageScore®. Most lenders use FICO. Though both models create scores based on similar key factors, the breakdown of scores is slightly different.

FICO Score

•   Exceptional (or excellent): 800 to 850

•   Very Good: 740 to 799

•   Good: 670 to 739

•   Fair: 580 to 669

•   Poor: 300 to 579

VantageScore

•   Super prime: 781 to 850

•   Prime: 661 to 780

•   Near prime: 601 to 660

•   Subprime: 300 to 600

Recommended: FICO Score vs. Credit Score

What Is the Average Credit Score?

According to the latest FICO data, the average FICO credit score in the U.S. is 717 — 36 points higher than the average 24-year-old’s score. And as of February 2025, the average VantageScore is 701. Both scores are well within the “good” or “prime” range, and could help borrowers qualify for favorable loan and line of credit terms.

Average Credit Score by Age

Age doesn’t necessarily determine your credit score. But as the chart below shows, the older you are, the more likely you are to have a higher score.

This makes sense. When you’re just starting out — as many 24-year-olds are — you may not have a long credit history. Plus, you might experience greater financial ups and downs as you find your professional footing, and this could impact your ability to pay off debts.

What’s a Good Credit Score for Your Age?

As we mentioned, the average credit score for a 24-year-old is 681. But remember, that’s just an average. No matter how old you are, FICO defines a good credit score as anywhere between 670 and 739. If your score falls within that range, your finances are likely in a sound place.

It’s worth noting that when you’re starting out, you may not have a credit score. Your credit history typically starts when you take out your first line of credit, and it normally takes around six months or so for credit bureaus to collect enough information for your starting credit to be calculated.

Though it can vary, a starting credit score may be anywhere from 500 to 700. You can gradually see it rise as you continue to bolster your credit.

How Are Credit Scores Used?

Credit scores are used in several ways. Lenders and creditors review your credit when you apply for a card or loan to help determine whether you qualify for financing. As you might expect, the higher your score, the greater your odds of getting approved for a credit card or loan with more favorable terms and rates.

But credit scores can also play a role in unexpected ways. For instance, this three-digit number could help determine how much you pay for insurance premiums or whether you’re approved to rent a home. And some potential employers might review your score during a routine background check.

Factors Influencing the Average Credit Score

To steadily build your credit score, it helps to understand the five key factors that influence it the most. Here’s a closer look at each component — and how much it counts toward your overall score.

•   Payment history (35%). Your track record of bill paying has the biggest impact on your FICO Score, so aim to pay your bills on time, every time. A spending app can help budget for the payments.

•   Credit utilization (30%). Also known as credit usage, this is how much credit you’re tapping into against the total amount available. Try to keep your credit card utilization low, as ringing up a too-high balance might signal to lenders and creditors that you’re spread thin financially.

•   Length of credit history (15%). A longer credit history shows lenders that you have a solid track record of using credit. Generally, the older the average age of your credit accounts, the higher your score tends to be.

•   Credit mix (10%). Having a diverse mix of credit can signal that you can responsibly manage different forms of debt. That said, you’ll want to only apply for the financing you need.

•   New credit (10%). When you apply for credit, a lender performs a hard credit pull, which can ding your credit score by a few points. Though the dip is temporary, it could stay on your credit report for up to a year.

How to Strengthen Your Credit Score

If you’re in your 20s, you might be in the early phases of understanding how long it takes to build credit. Here are a few things you can do to gradually lift your credit score.

Stay on Top of Payments

As we discussed, your payment history has a major impact on your credit score. Consider setting up automatic payments or changing your due dates to a time of the month that works better for you. For example, if the main cluster of bills is due at the top of the month, schedule your monthly credit card payments so they fall after your second paycheck. A money tracker app can help you keep track of payments so you won’t miss a due date.

Keep Credit Usage Low

If you have a credit card balance, try to ensure your credit utilization doesn’t exceed 30%. For instance, let’s say your credit limit on all your cards is $2,000. To maintain a 30% credit usage, you’ll want to carry a balance no larger than $600.

If you want to see whether your hard work is paying off, you can check your credit score for free.

Limit New Credit Application

There are reasons why you should avoid applying for unnecessary credit. For starters, a lender will likely do a hard inquiry with each application, which can temporarily ding your score. Also, applying for multiple lines of credit within an extremely short time frame could signal to lenders that you’re financially strapped.

There is an exception: If you shop for an installment loan, like a car loan or mortgage, lenders give you anywhere from 14 to 45 days to shop for rates. The hard pulls generally count as a single inquiry when you are rate shopping.

How Does My Age Affect My Credit Score?

While age doesn’t factor into your credit score, you may notice that your three-digit number may improve as you get older. This is because as you age, you’ve had more time to establish an account history and may have an easier time managing your debt obligations.

What Factors Affect My Credit Score?

As we discussed, the top factors impacting your credit score are payment history, credit usage, length of credit history, credit mix, and new credit.

If you’ve made some financial blunders and want to build or repair your credit, work on fixing the areas that have negatively impacted your score the most. So, for example, if you’ve fallen behind or missed payments, you’ll want to start paying bills on time.

Keep in mind that boosting credit doesn’t happen overnight. Your credit score updates every 30 to 45 days, so resist the urge to constantly check on your score. Instead, you’d be better off focusing on strategies that build up your credit.

At What Age Does Your Credit Score Improve the Most?

According to Experian data, the biggest jump in credit scores tends to happen between Gen Z and Baby Boomers. But again, the longer you’ve been responsibly managing an account, the higher your score will likely be.

How to Build Credit

There are several ways to build your credit — here are a few simple strategies to explore:

Become an Authorized User

If you have a family member or trusted friend with a solid credit history, ask if they can add you as an authorized user on your card. You’ll be able to make purchases with the card, but the primary cardholder is responsible for making payments.

Report Rent and Utility Payments

Alternative credit reporting, such as reporting your rent, cell phone bill, and utility payments, can be another way to improve your score when you’re just starting out. You usually need to sign up with a third-party platform that reports your on-time payments to the credit bureaus, and you may be required to pay a monthly subscription fee.

Open a Secured Credit Card

A secured credit card is usually easier to get than an unsecured one, though it requires you to put down a security deposit that typically matches your credit limit. Otherwise, a secured card works just like any other credit card. Making timely payments and using credit responsibly can help build your score.

Credit Score Tips

Besides being mindful of best practices to build your credit, you’ll want to check your credit score every so often and note any changes. You may be able to do this with credit score monitoring tools or through your bank or credit card company.

It’s also a good idea to regularly review your credit report for mistakes or inaccuracies. You can receive a free copy of your report each week via AnnualCreditReport.com.

Recommended: Why Did My Credit Score Drop After a Dispute?

The Takeaway

To recap, what’s the average credit score for a 24-year-old? According to Experian, it’s 681, which falls into the “good” category. When you practice sound financial behaviors, your score could increase even more over time. For instance, staying on top of payments, paying down debt, and keeping credit accounts open can all help bolster your score.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is a good credit score for a 24-year-old?

The average credit score for someone who is 24 is 681, which is technically considered a “good” FICO score. Younger consumers who are starting out on their credit-building journey may have a harder time achieving an excellent score.

What is a good credit limit for a 24-year-old?

The average credit limit for 24-year-olds in the U.S. is $12,899, according to Experian. However, what’s considered good depends on the individual’s finances, spending habits, and ability to pay down the balance.

How rare is an 800 credit score?

According to Experian data, 22% of Americans have a credit score of 800 or higher, which is considered an excellent score.

Is a 900 credit score possible?

Consumer credit scores range from 300 to 850, so a 900 credit score isn’t feasible.

Is 650 a good credit score?

A 650 credit score falls in the “fair” range. With a fair credit score, you can get approved for some forms of financing, but you’ll likely get higher interest rates and the less-favorable terms.

What credit score is needed to buy a $300K house?

If you’re buying a home with a conventional loan, you’ll need a minimum credit score of 620. Lenders may accept a credit score as low as 500 if you’re taking out an FHA loan.

Photo credit: iStock/blackCAT

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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The credit score you’ll need to buy a car will vary depending on your financial circumstances, the type of car you want to buy, and whether you’re buying used or new. That said, the average score needed to buy a car is 755 for new cars and 691 for used cars, according to the credit bureau Experian.

Looking to buy a car in the near future? Here’s what you need to know about the credit scores lenders may use when deciding whether to approve your auto loan application.

Minimum Credit Score to Buy a Car

Your credit score is a three-digit numerical representation of your credit history. There are two main credit scoring models used in the United States: FICO® and VantageScore®. FICO scores, which generally range between 300 to 850, are used in the majority of lending decisions.

If your credit score isn’t as high as you’d like, that doesn’t mean there will be no loan options for you. In fact, there isn’t a universal minimum credit score required to buy a car, though some lenders will set minimums of their own.

What’s important to know is that the lower your credit score, the harder it may be to secure a loan — and the more expensive borrowing could get. That’s because if you have poor credit, lenders may charge higher interest rates and fees.

Recommended: How Long Does It Take to Build Credit?

Understanding Auto Loan Credit Scores

Your credit score is based on information from your credit reports, which are maintained by the three major credit reporting bureaus: Equifax, Experian, and TransUnion. The report documents how you’ve managed credit in the past. For instance, it records how many credit accounts you’ve had, which accounts are active (and for how long), if you’ve paid your bills on time, and how much of your available credit you’re using.

There are many different credit scoring models out there, which use different parts of your credit report to calculate your score. For example, some models might ignore debt collections for smaller amounts, while others may consider them. Lenders can choose which credit score they wish to look at when considering you for a loan.

What Is a FICO Auto Score?

There are several versions of a FICO Score, including FICO Auto Score, which — you guessed it — is designed specifically for the auto industry. These scores help predict how likely a borrower is to repay an auto loan on time. This means your history of paying off a car loan could play an important role in determining your score.

How to Increase Your Credit Score Before Buying

As we mentioned, if you have a low credit score, it may be harder to secure a loan. And the loan you do secure may be more expensive. To make things easier and cheaper for yourself, you may want to look into ways to build your credit before applying for an auto loan.

Chief among the factors that affect your credit score is your payment history, which accounts for 35% of your FICO Score. One of the best things you can do for your credit file is to pay your bills on time, every time.

Tip: A spending app can help you spot upcoming bills, set a budget, and track where your money is going.

But payment history is just one factor that impacts your credit score. Your credit utilization — or the amount you owe versus your available credit — is also important and makes up 30% of your FICO Score. If you are using a lot of your available credit, lenders could worry that your finances are overstretched and, as a result, you may not have the resources to take on another loan. To help build your credit, consider lowering your credit utilization by paying down other debts first.

A long credit history can help improve your credit file, so you may want to avoid closing older accounts that are in good standing. And, if possible, try to avoid applying for multiple loans or credit cards in a short period of time. That’s because each application may trigger a hard inquiry, which can temporarily lower your credit score.

Your credit score updates at least every 45 days. To keep track of your progress as you work to improve your score, you can check your credit score without paying once a week from each of the credit reporting bureaus.

You might also consider signing up for credit score monitoring to help ensure your current credit score is always at hand.

While you’re at it, make it a habit of checking your credit report regularly. If anything is incorrect on the report, you are allowed to file a dispute with the company that reported the information and the credit bureaus that recorded it.

Recommended: How to Check Your Credit Score Without Paying

Where to Get an Auto Loan

When you’re ready to seek a loan, you’ll want to shop around for the best deals among several different lenders. You may consider getting loan offers from banks and credit unions, online lenders, and dealerships that offer financing. Credit scoring companies recognize that people often shop around to multiple lenders when seeking a loan. And in this case, they won’t penalize you for extra hard inquiries.

How Credit Scores Affect Auto Loans

The higher your credit score, the more likely it is that you’ve been responsible with credit in the past. Lenders see borrowers with higher scores as less of a risk, and they typically reward them with lower interest rates and better terms on auto loans.

On the other hand, lenders see borrowers with lower scores as a greater risk. To compensate for this risk, lenders may charge higher interest rates and offer less favorable terms.

Note that while the lowest FICO Score is 300, that is not necessarily your starting credit score. For instance, if you’re just starting building credit and have no credit history, you may in fact have no score yet.

The Takeaway

While there is no minimum credit score you need to buy a car, a higher score can mean you qualify for a loan with lower interest rates and better terms. If you have a lower credit score, consider doing what you can to boost it before you apply for an auto loan. This may include paying your bills on time, lowering your credit utilization, and keeping older accounts open.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How to get an 800 credit score from 720?

To raise your credit score from 720 to 800, focus on paying your loans on time, reducing the amount of credit you’re using, and possibly increasing your mix of credit.

What is the average American credit score?

The average credit score in the United States is 715, according to Experian.

How common is an 800 credit score?

Per Experian data, 22% of all Americans have a credit score of 800 or higher.

How rare is a 720 credit score?

A credit score of 720 falls within the “good” range. By that definition, roughly one in five of Americans have a good score.

How big of a loan can I get with a 700 credit score?

A credit score of 700 falls within the “good” range. This means that your loan request likely will not be denied. However, the exact amount you qualify for will depend on a number of factors, including your income, the type of loan you’re applying for, and your debt-to-income ratio.

Is a 720 credit score good enough to buy a car?

There’s no minimum credit score required for an auto loan. Still, a credit score of 720 is considered “good” and can help increase the chances you’re approved for a car loan.

Photo credit: iStock/Ridofranz

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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