Experian finds new year marks healthiest credit picture for U.S. consumers since 2007; National average credit score weighing in at 675 signaling a prosperous year

Costa Mesa, Calif., Jan. 11, 2018 — We’re embarking on another new year – a time of renewal and recommitment to goals, many of which are financial. To help consumers understand the impact that credit has on their lives, Experian is releasing its eighth annual State of Credit report which shows that consumer credit scores and signs of economic recovery are continuing an upward trend with credit scores coming exceptionally close to pre-recession numbers.

According to the latest Experian research shows that the nation’s average credit score is up two points to 675 —from 673 last year— and is just four points away from the 2007 average of 679. The study also shows that originations are increasing across nearly all loan types with personal loans and automotive loans showing 11 percent and six percent increases year over year, respectively. Additionally, consumer confidence is up 25 percent year over year and has increased more than 16 percent from the same point in time in 2007.

“The trend line that we are seeing is quite promising. With employment and consumer confidence on the rise, we’ve made great progress as a country since the recession,” said Michele Raneri, vice president of analytics and new business development at Experian. “The economy is expected to expand at a healthy pace this year supported by access to affordable consumer credit and we believe that credit will continue to rebound. All of the factors point towards a good year for credit in 2018.”

Credit Snapshot of the Nation

“Experian is committed to helping consumers understand the impact of their credit score. We want to help guide people when it comes to credit decisions-- from applying for a new cell phone to getting their first mortgage – and be there for each step big and small,” said Rod Griffin, director of public education at Experian. “One of our goals is to help consumers understand the purpose of credit scores and why they are important. Being equipped with that knowledge is key to financial well-being and getting the financial services they need.”

Annual Rankings
As part of this annual study, Experian also ranked U.S. cities by credit score. Minnesota is once again at the top of charts, with three cities setting shining examples of credit management: Minneapolis (709), Rochester (708) and Mankato (708). Cities in the South continue to struggle, but in regards to the bottom three—Greenwood, Miss. (624); Albany, Ga., (626); and Harlingen, Texas (631) – the first two have shown improvements, while Harlingen stayed the same.

Top 10 highest average credit scores by city

Bottom 10 lowest average credit scores by city 

Generational Divide
Each city manages credit differently, and the same is true for generations.

• While Generation Z is young and still establishing credit, Gen Z members are off to a strong start by keeping their number of credit cards and balances low. They are building their credit through different methods than the older generations before them with heavier student loan debts and fewer credit cards and department store cards, yet they seem to mirroring many of the Millennial credit behaviors, such as keeping their debt low and managing it well, and we expect that to continue.
• Generation Y/Millennials are doing well managing their credit and continue to see their scores climb—four points over the past year. They have also decreased their overall average debt by eight percent and have increased their mortgage debt by an additional six percent, which is a positive sign for this generation.
• Generation X has an average credit score of 658 along with the highest mortgage debt of all generations, as well as a high instance of late payments compared to the national average. Scores for Gen X members have improved over the last year, so it appears they are managing their debts better than they have in the past, but with the highest debts in all categories, this generation needs to proceed with some caution.
• Baby Boomers continue to carry quite a bit of debt, specifically mortgage debt. They have the lowest late payment instances of all the generations, and with many approaching retirement, they need to continue their positive credit behaviors to sail into their golden years.
• As the oldest generation, the Silent Generation still has a lot of mortgage debt, but members are keeping other debts low and making payments on time. They have the best credit score of all generations with a score of (729), as well as and the fewest late payments.

An infographic containing additional data on the generational differences is available here.

Additional data and educational resources
As the leading global information services company, Experian is uniquely positioned to provide insight into industry trends along with credit education expertise that spans more than 20 years. Experian is dedicated to improving consumer financial literacy and is committed to providing products and services that help consumers to better manage their credit reports and credit scores. To chat with Experian live and learn more about credit:
• Experian is sponsoring a WiseBread chat on January 18, reviewing the findings from this study, in addition to discussing credit basics. Register at http://www.wisebread.com and follow #wbchat.
• Join the #CreditChat,hosted by @Experian_US on Twitter and featuring financial experts and consumers every Wednesday at 3 p.m. Eastern time. A special #CreditChat on State of Credit will take place on January 24.

Analysis methodology
The consumer analysis is based on a statistically relevant sampling of Experian’s consumer credit database as of Q2 2017. Analyzed credit files did not contain personal identification information.

Contact:
Kristine Snyder
Experian Public Relations
1 714 830 5192
kristine.snyder@experian.com

About Experian
Experian is the world’s leading global information services company. During life’s big moments — from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers — we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organizations to prevent identity fraud and crime.

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