If you’ve checked your credit score recently and felt confused, you’re not alone.
Across the U.S., Gen Z’s average credit scores have been slipping, even as financial awareness has grown. For a generation raised on budgeting apps and “money TikTok,” that seems strange. But there’s a reason this is happening, and it says more about the system than the students themselves.

Let’s break down what’s really going on and how you can start reversing the trend while you’re still in college. 

The Credit Slide: What’s Happening with Gen Z Scores

According to recent Experian data, the average Gen Z credit score dropped in 2024 for the first time in years. The reasons? Rising living costs, increased reliance on short-term debt, and a system that still punishes inexperience.

For many students, it’s not that they’re mismanaging money, it’s that they’re starting from scratch in a credit system built for people with long histories.

Common patterns include:

• Limited or no credit history – Many students don’t have credit cards or loans yet, which means they don’t have enough data to be scored.
  
  

• Rising credit utilization – Those who do use credit often have small limits, so one big purchase can spike their utilization ratio.
  
  

• Late or missed payments – Even one late payment can drop a thin credit file by dozens of points.
  
  

• Short credit age – Gen Z’s credit accounts are newer, which naturally lowers their average score.

When combined, these factors make it harder for young adults to build credit, even when they’re trying to be responsible.

The Bigger Picture: Why Traditional Credit Systems Fail Students

The traditional credit system rewards time, not effort. It expects you to have a long, consistent record of debt and repayment — something most students simply don’t have.

That’s why a 20-year-old with perfect debit habits, rent payments, and daily transactions might still have no credit score at all. 

This system also penalizes early mistakes more harshly. A single missed payment on a small balance can hurt a student’s score more than it would for someone with 10 years of history. And for Gen Z, who often balance side hustles, tuition, and rent, that one slip is easy to make.

The result? Students doing “everything right” — avoiding debt, using debit, budgeting — are still being left out of the credit conversation.

That’s the gap fintech is now trying to close.

How Student Habits Changed and Why That Matters

Gen Z approaches money differently.
They’re more cautious about debt, they prefer debit to credit, and they use tools like Apple Pay and Cash App over traditional banks. This mindset is healthy, but it also means fewer opportunities to build a credit history the old-fashioned way.

The Problem with Avoiding Credit Cards

Most students avoid credit cards because they don’t want to fall into debt. That’s smart. But when you only spend on debit, your good habits (like paying on time or managing expenses) don’t get reported to credit bureaus. 

So even if you’ve never missed a payment in your life, your credit score doesn’t move, because there’s nothing for the bureaus to see.

The Fix: Building Credit Without Risk

Here’s the good news — credit building no longer requires traditional credit cards or loans.

New financial tools designed for students are changing the game. They help you build credit with the spending you’re already doing, without interest, hidden fees, or the risk of debt.

Example: How Fizz Makes Credit Building Simple

Fizz is one of the most popular credit card alternatives for students. It works on debit rails but functions like a credit card, using a line of credit that’s automatically repaid every day.

That means:

• No interest or hidden fees
  
  

• No credit check to apply
  
  

• Automatic daily payments (so you never forget a due date)
  
  

• Reports to Experian and TransUnion, helping you build credit safely

Fizz lets students build a solid credit history while using money they already have, no debt, no surprises, no stress.

If your goal is to build credit early, safely, and without risk, tools like Fizz are the smarter place to start.

5 Simple Ways to Stop the Credit Slide

1. Start early. The length of your credit history matters, so open a credit-building tool now rather than later.
   
   

2. Keep utilization below 30%. Don’t max out your available line; it signals risk.
   
   

3. Set up autopay. Late payments can drop your score fast. Automating them protects you.
   
   

4. Monitor your credit regularly. Use free tools from Experian, Credit Karma, or Fizz insights to track progress.
   
   

5. Avoid hard inquiries. Too many applications for new credit in a short time can temporarily lower your score.

The Bottom Line

Gen Z isn’t bad with money — the system just hasn’t evolved to match how this generation manages it.
But that’s changing. With smarter tools and better habits, students can rewrite what it means to have “good credit.”

If you’re a student looking to build credit safely and avoid debt, Fizz makes it simple — no interest, no hidden fees, and no credit check.

Learn how Fizz helps students build credit the smarter way →

FAQs

1. Why are Gen Z credit scores lower than older generations?
Because Gen Z is newer to credit. They have shorter credit histories, fewer accounts, and rely more on debit and fintech tools that don’t always report to credit bureaus.

2. Can I build credit without a credit card?
Yes. Tools like Fizz report your daily debit-based spending to Experian and TransUnion, helping you build credit without using a traditional credit card or taking on debt.

3. What’s the fastest way to improve my credit score as a student?
Pay on time, lower your utilization rate, and use a credit-building tool like Fizz that reports consistent, positive activity to credit bureaus.

4. Do missed payments affect Gen Z more?
Yes. Since most students have thin credit files, even one missed payment can cause a larger drop compared to someone with a long credit history. 

5. What’s a good credit score for a college student?
Anything above 700 is considered strong for a student, but the key is steady progress. Focus on building a consistent, positive history over time, and your score will follow.