A new study from Harvard’s Opportunity Insights group has uncovered a surprising truth: your credit score doesn’t just reflect your recent financial behavior—it can also reveal a lot about how and where you grew up.
Using data from over 25 million Americans, researchers found that a person’s habits around paying bills, which are key to credit scores, are shaped early in life and stay with them for decades.
The study focused on people born between 1978 and 1985, linking anonymous credit bureau records with U.S. Census and tax data.
This allowed the team to examine how someone’s hometown, race, and their parents’ income influenced their credit scores later in life.
Even though credit scoring systems aren’t allowed to use race, income, or location in their calculations, these factors still show up in striking ways.
By the age of 25, adults whose parents were among the bottom 20% of earners had an average credit score of 615.
Those whose parents were in the top 20% averaged 725—a 110-point difference. Racial gaps were also stark: Black Americans at age 25 had scores nearly 100 points lower than white Americans and 140 points lower than Asian Americans. These gaps barely changed even by age 65.
Even when researchers looked only at people from low-income families, the differences remained.
Among those from the lowest 25% of parental income, Black Americans still had credit scores about 69 points lower than white Americans.
Even more telling, Black Americans from high-income families had credit scores similar to white Americans from low-income backgrounds.
Geography played a big role too. People raised in regions like the Upper Midwest and New England had, on average, higher credit scores. Those from parts of the South and Appalachia had lower scores.
At the county level, Bergen County, New Jersey had the highest average score (724), while Baltimore, Maryland had one of the lowest (about 100 points lower).
Interestingly, when people moved as children from one place to another, their future credit behavior often reflected the financial habits of the new community. But if they moved as teenagers, they tended to keep the habits from where they were born. This suggests that early experiences in a community have lasting effects on how people manage debt.
The study also found that Black Americans were more likely to lend money to family and friends and less likely to receive financial help from parents. In many cases, they are the ones supporting older family members, not the other way around.
These findings mirror other research from Opportunity Insights that showed the same regions promoting good repayment behavior also tend to promote upward mobility—better education, jobs, and long-term success.
But the researchers aren’t offering a quick fix. In fact, they note that even current credit scores may understate the true size of the racial and economic gaps in repayment behavior. Making the scoring system more accurate could actually widen the disparities.
Instead, they suggest that social scientists, policymakers, and educators need to better understand what happens in childhood that shapes people’s financial habits for life. As co-author Jamie Fogel put it, “If we want to improve access to credit, we really need to understand what’s happening before people’s 25th birthday.”
