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Despite tough times for Americans’ finances during the coronavirus pandemic, average credit scores continued to climb to a 13-year high.
According to Experian’s 12th Annual State of Credit Report report, Vantage’s average score increased from 688 in 2020 to 695 in 2021 and Vantage’s median score increased from 697 in 2020 to 701 in 2021. lower credit usage, reduced card balances and total debt levels year over year and before the pandemic hit.
Although consumers took on more mortgage and auto debt, average non-mortgage debt fell slightly from $25,483 in 2020 to $25,112 in 2021.
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Average credit utilization rates fell 1% year-over-year to 25%, while average credit card balances increased from $5,897 in 2020 to $5,525 in 2021. of credit usage and the only generation to increase their credit card balance by $115 year over year.
Average delinquency rates also dropped significantly across the board, with rates of invoices past due an average of 30 to 59 days dropping from 3.8% in 2019 to 2.3% in 2021, invoices overdue for an average of 60 to 89 days down. from 1.9% in 2019 to 1% in 2021, and default rates of 90 to 180 days on average falling from 6.6% in 2019 to 2.5% in 2021.
Gen Z reduced their 90-180 days past due rate by 29% year over year to 1.73 in 2021, a decrease of 72% from the same period in 2019. Millennials also reduced their delinquency rate from 90 to 180 days past due to 1.73% in 2021, from 10.6% in 2019.
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This year, Experian partnered with Operation Hope to launch the first-ever HOPE Financial Wellness Index, which found 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). The states with the lowest credit scores were in the south, including Mississippi (666), Louisiana (669), Alabama (672), Oklahoma (672), and Texas (673).
“While consumers on average manage their credit history well, we know that many communities are in critical need of more education and financial resources,” said Operation HOPE Founder and CEO John Hope Bryant, in a press release. “By helping people increase their credit score, we’re empowering them to take advantage of one of our country’s most democratic tools. From housing and employment to health care and education, creditworthiness can be leveraged to improve our overall quality of life.
More than a quarter of Americans report being in households that struggle to pay for usual household expenses, according to the Census Bureau’s latest Household Pulse Survey.
