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Experian Looks at Consumer Credit Scores a Decade After Heading into the Financial Crisis

Consumer credit bureau Experian released key findings from annual State of Credit report recently, looking closely at today’s…

  • June 15, 2019

Consumer credit bureau Experian released key findings from annual State of Credit report recently, looking closely at today’s consumer credit behaviors and compared them with those in 2008 — the year the United States headed into its worst recession in 80 years.

Experian’s research showed that, while Americans’ credit scores are not as high as they were at the start of the economic downturn, 2018 marks the largest year-over-year increase since 2008, with an average VantageScore®1 of 680.

“We’re continuing to see the positive effects of economic recovery, through improved credit scores and lower delinquency rates,” said Michele Raneri, vice president of analytics and business development at Experian. “Since the recession, responsible credit card behaviors and lower debt among younger consumers are driving an upward trend in average credit scores across the nation. Over the past 10 years, those 18 to 21 increased their credit scores by 23 points on average compared with those 18 to 21, ten years ago.”

Generational divide 

The downturn impacted the financial behaviors of consumers of all ages differently. When comparing the credit behaviors of different age groups in 2008 and 2018, Experian found:

  • As the oldest group, those aged 72 and older experienced some significant changes. While this group continues to have higher credit scores than any other, they saw the most significant drop in average credit scores, with a decrease of 40 points (772 in 2008 compared with 732 in 2018).
  • This group also had the most significant increase in credit card balances, up $767 in 2018 to $4,703 (compared with $3,936 in 2008). They also experienced the largest increase in mortgage debt, up $29,602 for a total of $160,735 in 2018 (compared with $131,133 in 2008).
  • Those aged 51 to 71 continue to have more credit cards(4.02 in 2008 compared with 3.48 in 2018) and retail cards (3.41 in 2008 compared with 2.85 in 2018) than any other age group.
  • They have an average credit card balance of $7,637, compared with $8,127 in 2008. In addition, this group has the second-highest amount of nonmortgage debt of all groups (behind those aged 36 to 50) at $27,438, compared with $27,028 in 2008.
  • While those aged 51 to 71 have more credit cards and retail cards than any other age group, those aged 36 to 50 continue to have higher balances on credit cards($8,897 in 2008 and $8,012 in 2018) and retail cards ($2,032 in 2008 and $2,192 in 2018).
  • This group also has consistently carried higher nonmortgage debt ($30,179 in 2008 and $31,174 in 2018) and mortgage debt ($209,442 in 2008 and $239,009 in 2018) than other age groups.
  • Consumers aged 22 to 35 saw the second-largest jump in average credit scores since 2008, increasing 15 points to 644 from 629. This group has lowered their credit card balances ($5,583 in 2008 to $4,593 in 2018) while increasing their average mortgage debt ($192,554 in 2008 compared with $209,713 in 2018).
  • Since 2008, those aged 18 to 21 increased their average balance on credit cards($2,056 in 2008 compared with $2,259 in 2018) and saw a 23-point increase in credit scores — the largest of any other age group (616 in 2008 compared with 639 in 2018).

This is considered a near-prime score, approaching the typical prime lending criteria of 661.

Credit behaviors of males and females

Year-over-year shifts

Today, the nation’s average credit score is 680 — five points higher than the 2017 average of 675. The average number of credit cards for consumers decreased slightly year-over-year to 3.04 (compared with 3.06 in 2017), while credit card balances increased $152 to $6,506.

“With this annual report, our goal is to provide insights that help consumers make more informed decisions about credit use to change their financial habits and improve financial access,” said Rod Griffin, director of consumer education and awareness at Experian. “Understanding the factors that influence their overall credit profile can help consumers lead financially empowered lives.”

Some States doing better than others

As part of the annual study, Experian also ranked states by their average credit score in 2018. Minnesota, South Dakota, Vermont, New Hampshire and Massachusetts are the top-ranking states in the nation, with prime credit scores of 703 or more.

Mississippi, Louisiana, Nevada, Georgia and Texas are the five lowest-ranking states, with credit scores below 659.

Experian’s analysis is based on a statistically relevant sampling of Experian’s consumer credit database, available on the Experian Ascend Technology Platform, from Q2 2008, 2017 and 2018.