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44 Credit Score Statistics: 2019/2020 Data By Age, Gender & Generation

by Arthur Zuckerman

Credit scores are used to measure a consumer’s creditworthiness. There are a few credit score models used to determine this, but the most common is the Fair Isaac Corporation (FICO) rating.

The FICO credit score range has five tiers:

  1. Excellent: 800 to 850
  2. Very Good: 740 to 799
  3. Good: 670 to 739
  4. Fair: 580 to 669
  5. Poor: 300 to 579

The higher the scale a consumer’s score is, the higher the likelihood of getting loan approval and better interest rates.  There are five factors that determine credit score, chief of which are how much debt you owe and the length of your payment history. People with credit scores that fall below 640 are categorized as subprime borrowers. They are considered a higher risk, have shorter repayment terms, and are often charged higher interest rates.

This article has organized essential statistics and information that will be useful in increasing your credit score and repairing credit ratings to make you a approval-worthy to lenders.

Credit Score Statistics Table of Contents

General Credit Score Statistics

Credit scores are increasing. It is now at its highest on record growing 2% in the last decade. Higher credit scores are benefiting consumers and borrowers but there are 35% of Americans who do not know their credit scores and are unaware of how it affects their purchasing power. Keeping debt low is part of financial responsibility but having debt also increases your credit score if paid on schedule.

  • The lowest credit score on record was 686 in 2009 during the mortgage crisis. The current FICO score for 2019 is 703, the highest on record, and an increase of 14 points since 2010.
  • Millennials are to be thanked for the record credit score increases. Gen-Y had a 25-point increase from 2012, the biggest increase in the credit score of any generation. Millennials have an average of 668, just 2 points shy of a “good” rating.
  • Only the payment history, amounts owed, length of credit history, credit mix, and new credit are factored into your credit score.
  • 6 out of 10 Americans have a credit score above 700. It is the highest percentage seen at that level, a rating of “good.”
  • Along with an increase in credit scores, Americans also saw increases in debt; Non-mortgage loans grew 3% per year over the past 10 years.
  • 850 is the highest possible FICO credit rating, only 1.2% of Americans have achieved ‘exceptional’ tier.
  • 80% of financial resolutions Americans make for the new year include improving their credit scores and better handling of their credit card use.
  • Debt is not always bad. Having a mortgage will increase your credit, provided you make your payments as scheduled.
  • 12% of Americans have a “bad” credit score, scores lower than 550.
  • A home-buyer will typically have a credit score average of 728 which is higher than the national average of 706.

Source: Experian

Credit Score By Gender

A gender gap exists in the realm of credit with men on the advantage. Twelve points typically separate men and women’s credit scores across income ranges—from $35,000 to over $150,000. The disparity is also present when compared according to age brackets. The score gap increases with age as earning capacity grows.

  • Men have a higher average credit score compared to women. A median of 12 points separates the average score between the genders.
  • Though other factors may affect the difference in credit scores between the genders, higher average incomes for men tip the scales in their favor resulting in increased borrowing capacity and better credit scores for men.
  • Single women were found to have higher debt usage, longer credit histories, increased use of credit revolvers, and higher installment loan balances. Men, on the other hand, exhibit higher rates of bankruptcy.
  • Credit scores may be a predictor of how long a person will stay married. A Federal Reserve study found couples with closely matched credit scores at the beginning of their relationships have a higher likelihood of staying together.

Credit Score By Age

There is a positive correlation between older age and higher scores. Older people do not necessarily have more money but they have acquired expenses and experiences that have contributed to their total credit score.

  • The 60 and above age group have the highest average credit score among age groups, 749, not because they have more money but due to a more stable living situation and an accumulation of previous big-ticket purchases—a house, car, or higher education.
  • The age range of 50-59 with its average credit score of 706 is the closest to the US national credit score average rating of 703.
  • Single, American males aged 21-40 have higher credit scores compared to their female counterparts.

Source: Shift Processing

Credit Score By Generation

The higher credit scores for older generations can be explained in the same vein as with age. Older generations also have different attitudes towards money and debt-handling.

  • Credit scores based on generations share similarities with credit scores by age with the oldest generation getting the highest average credit score. In this case, it is the Silent Generation, those born from 1925 to 1945. The Silent generation’s average credit score is 730.

Credit Score By Race

Racial inequality has consequences for borrowers with Blacks and Hispanics the most impacted. Whites are leading in the wage gap followed by Asians but the trend is reversed in credit scores where Asians have an 11-point advantage over Whites.

  • Race has an impact on a person’s credit score. Asians have the highest average credit scores at 745, Blacks have the lowest with an average of 677.
  • The highest average credit score of a home-buyer based on minority status is 745 for Asians.
  • Blacks and Hispanics are at the opposite end of the spectrum at 677 and 701 respectively.

Source: Shift Processing

Credit Score By Economic Class

People in the lower-income bracket have lower credit scores and a higher likelihood of getting into debt, unable to make payments on bills and loans on time, perpetuating a cycle of low income and debt.

  • Unsurprisingly, those on the lower end of the economic class have lower credit scores. The average credit score for the lower class is 664, ensconced in the ‘fair’ range but can be pulled down further by missing payments.

American Credit Score Statistics

Part of adult life is improving and maintaining a good credit rating.  Nearly 7 in 10 Americans have a good credit score but there is still a portion without a credit rating or a spotty record that hampers efforts in credit score repair.

  • 22% of Americans do not have a credit score. Half of this percentage has a stale credit score that makes it impossible to generate a valid FICO score while the other half do not have any credit file with any of the three credit bureaus—Equifax, Experian, and TransUnion.
  • The average credit score in the US as of the middle of 2019 is 703.
  • A “good” credit score range is between 670 to 739. 67% of Americans have a credit score of good or higher.
  • Credit scores in the “exceptional” tier are between 800-850, only 21.8% of Americans have a credit score in this range.
  • 18% of Americans have credit scores that fall in the 580-669 range of “fair.” those in the fair range are considered sub-prime and have lower chances of qualifying for a loan or getting better interest rates.

Source: MyFICO

Credit Score By State

43 out of 50 states have increased their average credit score ratings in 2019. An average increase of two points was seen among improved scores. There is no trend that defines why some states have better credit scores than others and why some are static. Factors such as cost of living and lower population rates affect how credit scores are averaged per state.

  • Minnesota has the highest credit score out of the 50 states for the last eight years. Its current average FICO score is 733. The state also has the lowest ratio of delinquent credit accounts which is just over 10%.
  • Mississippi has the lowest average credit score out of the 50 states. Although it ranks last with 667, it has increased 0.133% from its previous score.
  • The average gain in credit score among the states was 2 points. The largest jump is with Wisconsin, 7 points, an increase of .97% from 2018’s 718.

US Consumer Credit Statistics

Increases in credit score ratings are tempered by increasing debt. The consumer economy has Americans amassing debt at the rate of 3%  a year over the last 10 years. A look into the average consumer credit profile will show hikes in the average balance for mortgages, car loans, and credit card balances. Personal loans are the fastest-growing debt category but the average balance has diminished by 0.53% or $86 from the previous year.

  • Personal loans are the fastest-growing debt category, increasing 11% year-over-year from 2018.
  • A quarter of Americans have a personal loan, The rise in FinTech firms has driven the growth of personal debt.
  • 67% of Americans have at least one credit card and carry an average credit card balance of $6,194 in 2019.
  • Close to 50% of people do not pay off their credit balances each month.
  • The average mortgage debt for 2019 is $203,296. An increase of $4,919 from 2018.
  • 36% of Americans held a mortgage in 2019. Of this, Boomers and Gen-X carry 73% of total mortgages.
  • Millennials carry 15% of total mortgages. Despite the low percentage, Millennials with mortgages have increased by 75% in the last five years.
  • The average student loan debt has increased by 6% from the previous year with the average loan balance per borrower at $35,620 in 2019.
  • Americans have a combined student loan debt of $1.5 trillion.
  • 17% of Americans had a student loan in 2019. 48% of Millennials carry a student loan balance, the largest among the generations.
  • Although close to half of Millennials carry a student loan balance, Gen-X has the highest average student loan balance of $39,981 while Millennials have $34,795.
  • 20% of Americans aged 20-29 do not know their credit scores.
  • The minimum credit score needed to apply for a standard mortgage is 620.
  • Mortgages backed by the Federal Housing Administration (FHA) require a credit score as low as 500. Some caveats to getting a mortgage approved by the FHA state that a credit score lower than 580 would require a 10% down-payment while scores of 580 and higher would only require a 3.5% down payment.

US Consumer Credit Profile

Category 2018 Averages 2019 Averages
Credit Score 701 703
Annual Household Income

(estimate only, not included in credit score computation)

$77,762  $79,834
Credit card balance $6,040 $6,194
Retail card balance $1,124 $1,165
Student loan balance $33,672 $35,620
Mortgage balance $198,377 $203,296
Auto loan balance $18,945 $19,231
Personal loan balance $16,345 $16,259

Source: Experian

Increasing Credit Scores

Credit is neither good nor bad. It can be harnessed as a tool to improve credit scores that will have positive effects on personal finances. Here are other steps to increase credit scores.

  1. Always pay your bill on time. Bill payment activity  will reflect in your payment history which is 35%, the biggest chunk, of your credit score factors.
  2. Keep your debt balance low and pay off debt in the shortest time possible. This may require paying more than the minimum rates but increasing payments, if you can afford it,  will also lower interest rates.
  3. Avoid applying for unnecessary new credit. Multiple inquiries into your credit report negatively affect your score.
  4. Diversify your credit mix—mortgage, car loan, student debt, and credit cards—increasese the credit score but make sure to make payments on time.

 

 


References:

  1. Investopedia | Credit Score: definition, Factors, and How to Improve it
  2. Shift Processing | Credit Score Statistics
  3. The Ascent | 22% of Americans Don’t Have a Credit Score — Here’s Why
  4. Lexington Law | 29 Credit Score Statistics for 2020
  5. Federal Reserve | Credit Scores and Committed Relationships
  6. Federal Reserve System | Gender-Related Differences in Credit Use and Credit ScoresValue Penguin | Average Credit Score in America: 2019 Report
  7. Elite Personal Finance | Average Credit Score in America 2020
  8. CreditCard.com | Americans resolve to boost their credit scores in 2020, study shows
  9. Fortunly | Credit Score Statistics: How to Interpret – and Boost – Your FICO Score
  10. Experian | What Credit Score Do I Need to Get a Mortgage?
  11. Experian | 2019 Consumer Credit Review
  12. FHA | Credit Requirements for FHA Loans
  13. MyFico | What’s In My FICO Scores?

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