I don’t know about you, but as a student, I relished the day when my life was not judged by a number (i.e. grades). Then at some point in my early adulthood, it hit me that my life will forever be judged by a number: my credit score.
The State of Credit
Experian just released statistics this week on the State of Credit Scores in 2017. Credit scores overall were higher as was debt. The survey showed that the average credit score is 675; Americans have on average 3.1 credit cards; an average mortgage debt of $201,811; average non-mortgage debt of $24,706; and an average balance of $6,354 on their credit cards.
The survey showed that more Americans have a “super-high or super prime” credit score (781-850) than a “very low or deep subprime” credit score (below 600). In an economy where wages are flat and homeownership is at its lowest rate since the 1960’s, the Federal Reserve reports that consumer spending continues to rise. The year also saw increases in auto loan delinquencies and repossessions.
According to the survey, Minnesota has the highest credit score, and Mississippi has the lowest. It seems that the highest credit scores tend to be in colder climates/northern states, and the lower credit scores are in warmer climates/southern states. The Experian survey also breaks down credit scores by generation (Silent Generation, Baby Boomers, Gen X, Gen Y and Gen Z). The Silent Generation (those born before 1946) has the highest average credit score of 729 and Gen Z (those born after 1996) has the lowest average credit score of 634.
Credit Card Debt
Credit card debt hit a record high in 2017 signaling that consumer spending and confidence is up, but also increasing the amount of debt consumers have and an increase in their debt limits. According to the survey, access to credit cards reached its highest level since 2005. Delinquencies on credit cards are up as well, but lower than the delinquency rates during the Recession.
Experian also cites that the Federal Reserve announced that a record number of Americans have car loans, and the average term of a car note is now 68 months. As most of us have heard the past few years, the survey solidifies that student loan debt exceeds total credit card debt. The average student loan balance in 2017 was $34,144. Experian also cites that the Consumer Financial Protection Bureau (CFPB) says the fastest-growing segment of student loan borrowers are Americans over 60. 2017 also proved to be the first time millennials (Gen Y’rs) made up the largest segment of homebuyers.
Heather Ellis Banks is an Associate Attorney at the Bond & Botes Law Offices in Knoxville, Tennessee. She holds a Bachelor of Science from the University of Tennessee Knoxville, and a Juris Doctorate from the University of Memphis, Cecil.C. Humphreys School of Law. She has been helping consumers to navigate through the bankruptcy process since 2005. Read her full bio here.