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Experian and Operation HOPE Find Most Consumers Are Managing Credit Well Despite Pandemic Challenges

Average U.S. Credit Scores Climb to 695 According to Experian’s State of Credit Report and New Hope Financial Wellness Index

As we end the second summer since the arrival of COVID-19, Experian announced key findings from its 12th annual State of Credit report. This year’s report also serves as a launch for Operation HOPE’s all-new HOPE Financial Wellness Indexwhich will help shine a consistent light on the current state of consumer credit. Despite a challenging year and a half, the new data shows consumers are managing credit well with average credit scores climbing seven points since 2020 to 695 – the highest point in more than 13 years.

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“Understanding the information included in your credit report and how it impacts your credit scores is one of the best ways to protect your financial health”

According to Experian’s report, many consumers were managing credit well before the pandemic’s arrival and the accommodations afforded by the Coronavirus Aid, Relief and Economic Security (CARES) Act may have helped consumers protect their financial health. At the same time, stay-at-home orders and record savings levels1 may have contributed to lower unsecured and total debt levels, lower credit utilization rates and fewer missed payments.

This year, Experian is partnering with Operation HOPE – the nation’s largest nonprofit dedicated to improving financial literacy – to launch the HOPE Financial Wellness Index, which highlights the average credit score in every state and city.

According to the index, consumers in Minnesota have the highest credit scores with an average of 726, followed by Vermont (719), New Hampshire (718), Washington (717) and Massachusetts (716). States with the lowest credit scores were found in the south, including Mississippi (666), Louisiana (669), Alabama (672), Oklahoma (672) and Texas (673).

The HOPE Financial Wellness Index will be updated regularly and will be used to develop programming and identify communities most in need of financial education and resources.

“We believe credit education plays an important role in driving financial inclusion and helping consumers reach their fullest potential,” said Alex Lintner, President Experian Consumer Information Services. “While these findings are positive, we recognize they do not tell the full story and many consumers face financial obstacles due to a limited credit history. We are committed to working with consumers, as well as our partners like Operation HOPE, to improve financial equity and access.”

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Given the unique circumstances of 2020, this year’s report compared credit trends over the last three years. While consumers took on more mortgage and auto debt, score improvements were supported by fewer missed payments, lower credit utilization rates and reduced card balances and total debt levels year-over-year and prior to the pandemic’s arrival.

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Highlights of Experian’s State of Credit report include:

2021 State of Credit Report

2019

2020

2021

Average VantageScore® 2

682

688

695

Median VantageScore

687

697

707

Average number of credit cards

3.0

3.0

3.0

Average credit card balance

$6,494

$5,897

$5,525

Average revolving utilization rate

30%

26%

25%

Average number of retail credit cards

2.50

2.42

2.33

Average retail credit card balance

$1,930

$2,044

$1,887

Average nonmortgage debt

$25,057

$25,483

$25,112

Average mortgage debt

$210,263

$215,655

$229,242

Average auto loan or lease debt

$19,034

$19,462

$20,505

Average 30–59 days past due delinquency rates

3.8%

2.4%

2.3%

Average 60–89 days past due delinquency rates

1.9%

1.3%

1.0%

Average 90–180 days past due delinquency rates

6.6%

3.8%

2.5%

“While consumers on average are managing their credit histories well, we know there are many communities in critical need of more financial education and resources,” said John Hope Bryant, Operation HOPE founder and CEO. “By helping people raise their credit scores, we are empowering them to take advantage of one of our nation’s most democratic tools. From housing and employment to healthcare and education, credit worthiness can be leveraged to improve our overall quality of life. We’re committed to using the HOPE Financial Wellness Index as a force for good in the communities we serve.”

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Understanding generational differences

State of Credit also spotlights how each generation is managing their debts, showing scores have improved for every generation year-over-year. This trend is attributed to declining utilization rates and fewer missed payments. Credit utilization rates have declined for nearly every generation since 2019 except Gen Z who saw a slight uptick year-over-year. Similarly, credit card balances decreased for consumers of all age groups except Gen Z who increased their balances by $115 year-over-year.

Across the board, consumers are missing fewer payments, with notable improvements seen among the youngest consumers. Gen Z decreased their 90 – 180 days past due delinquency rate by 29 percent year over year to 1.73 in 2021. This is a 72 percent decrease from the same period in 2019. Millennials also decreased their 90 – 180 days past due delinquency rates to 1.73 percent in 2021, down from 4.4% in 2021 and 10.6 percent in 2019.

Additional 2021 generational findings from Experian’s State of Credit report include:

2021 findings by generation

Gen Z

Gen Y

Gen X

Boomers

Silent

Average VantageScore®

660

667

685

724

730

Median VantageScore

674

678

699

755

741

Average number of credit cards

1.7

2.7

3.3

3.4

2.7

Average credit card balance

$2,312

$4,569

$7,236

$6,230

$3,821

Average revolving utilization rate

31%

30%

30%

21%

13%

Average number of retail credit cards

1.6

2.1

2.5

2.5

2.1

Average retail credit card balance

$1,125

$1,819

$2,214

$1,887

$1,329

Average nonmortgage debt

$12,524

$28,317

$32,898

$24,136

$11,725

Average mortgage debt

$192,276

$255,527

$259,100

$198,203

$163,254

Average 30–59 days past due delinquency rates

2.1%

3.1%

3.0%

1.8%

1.1%

Average 60–89 days past due delinquency rates

1.0%

1.3%

1.3%

0.8%

0.5%

Average 90–180 days past due delinquency rates

1.7%

3.2%

3.4%

2.0%

1.3%

A strong credit history and responsible credit management can help consumers save thousands of dollars over a lifetime. For example, a person with a low credit score may pay close to $3,000 more in interest to purchase a $10,000 used car3 and a person with a subprime credit score may pay $241 more per month or $86,503 more over the life of a 30-year fixed-rate mortgage loan than a person with a score of 760 or above4.

“Understanding the information included in your credit report and how it impacts your credit scores is one of the best ways to protect your financial health,” said Rod Griffin, senior director consumer education and advocacy at Experian. “I encourage consumers who are looking to improve or maintain their credit scores to check their credit report regularly and take advantage of the free resources Experian has available to help.”

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