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Americans’ credit scores are at an eight-year high, Experian’s latest study shows

For 2019, average VantageScores rose another two points

Summary

Consumers’ average credit scores are still on the rise, reaching the highest point in eight years. Find out what the average score is and see how yours compares.

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U.S. consumers’ credit scores have improved year-over-year to hit an eight-year high, according to a new report from Experian.

The credit bureau on Dec. 19 released key findings from its annual State of Credit report, which showed U.S. consumers’ average credit scores have gone up year-over-year by two points to hit an eight-year high of 682.

The average VantageScore in 2018 was 680, compared to 675 in 2017.

Additionally, the average number of cards consumers carry slightly increased from 3.04 in 2018 to 3.07 in 2019, and average credit card balances went up from $6,506 in 2018 to $6,629.

“We’re seeing a promising trend in terms of how Americans are managing their credit as we head into a new decade with average credit scores increasing two points since 2018 to 682 – the highest we’ve seen since 2011,” said Shannon Lois, Experian’s head of analytics, consulting and operations, in a news release.

Genders exhibit different credit behaviors

Perhaps the most significant information from the Experian study is the comparison between different genders’ credit behaviors.

It found that women have a higher average credit score of 686 compared to men (682). Here are some other ways genders treat credit differently:

Here’s what Experian found:

  • Men have more overall debt than women. Their nonmortgage and mortgage debt is at $27,314 and $220,421 respectively, compared to $24,176 and $203,630 for women.
  • Women carry 3.17 credit cards on average compared to men, who have an average of 3.01. Women also have more retail cards than men (2.83 compared to 2.13), but carry lower average credit card and retail card balances of $6,569 and $1,858 respectively, compared with $6,872 and $2,087 for men.
  • Men’s 90-plus days past due delinquency rate is a bit higher than women’s (34% compared to 33%).

See related:  Poll: 56% of balance-carrying cardholders have had debt for at least a year

Experian’s report revealed Gen Xers tend to carry higher credit card debt than baby boomers, millennials and Gen Zers. Check out the stats:

  • Gen Xers have the highest average credit card balances at $8,383.
  • Baby boomers come in second with an average credit card balance of $7,571.
  • Millennials’ balances came in third highest at $5,071.
  • Gen Zers had the lowest average credit card balances at $2,503.

The study also ranked states by their average 2019 credit scores. The five top-ranking states in the country were Minnesota, Vermont, South Dakota, New Hampshire and Massachusetts, with prime credit scores of 705 or greater. The five lowest-ranking states were Mississippi, Louisiana, Alabama, Texas and Oklahoma, with scores at or below 660.

Consumers are using their credit wisely and managing debt well

These State of the Credit reports aim to raise awareness regarding the importance of credit reports and credit scores, said Ron Griffin, Experian director of consumer education and awareness.

“As we prepare for a new decade, we’re continuing to see the positive effects of economic recovery,” Griffin said.

Overall, this report shows that consumers are using the credit they have responsibly and managing their debts well, Griffin added.

Average credit card balances and debt are up year-over-year, yet utilization rates remain consistent at 30%, indicating people are using credit as a financial tool and managing their debts responsibly, he noted.

Griffin also said Experian hopes more people pay attention to their credit histories and understand their importance because when they get involved in actively managing their credit histories it’s a win.

“Understanding where you stand for a credit perspective can help you prepare for a financially healthy new year,” he said.

One expert warns consumers to get rid of credit card debt now

Despite the positive report, Ted Rossman, industry expert at CreditCards.com, has reservations about credit card debt being on the rise.

Many consumers are just treading water with credit card debt, not paying it down and getting ahead, he said.

Rossman advised consumers to pay down their credit card debt ASAP because interest rates are so high.

He urged people to act now, while times are good, to prepare for when they might not be.

Rossman said ways to prepare for an eventual downturn include paying down credit card debt by getting a balance transfer card, finding a side hustle, selling unneeded possessions and cutting expenses.

See related:  10 tips to improve your credit score

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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