The Frugal Creditnista

Credit Score Stats for 2022: Build a Better Score This Year!

Your credit score plays an important role in everyday life. It determines everything from how much interest you pay on credit cards and loans to whether you even qualify for a loan in the first place. Improving your credit score starts with knowing what your score is. But it’s also helpful to see how your credit score stacks up against millions of other Americans.

We’ve rounded up 9 of the most important credit score stats from the past couple of years. Use these insights to gain perspective on the credit landscape and make a better score a priority for 2022:

1. One in five individuals ages 20-29 do not know their credit score.

You start building credit if you have a reported payment history at least spanning six months. For many individuals, this starts when they reach adulthood (18+ years old), but you can also start building credit before then. Knowing credit score should become a priority as soon as you toss your name into the credit arena.

2. The average credit score in the United States is 698.

This figure is based on February 2021 data from VantageScore. It also represents a 13-point drop compared to December 2020, where the average credit score reached 711. Even with the drop, this is still considered a “good” credit score in the eyes of lenders.

3. 42% of Americans have accumulated more credit card debt during the pandemic.

A recent CNBC report found that many individuals that carried a credit card balance added even more to the pile. Of those, 47% claimed their extra expenses were directly caused by the pandemic. Higher balances increase interest payments, especially if the cards aren’t paid off each month. 

4. More than half of Americans do not pay off their credit cards every month.

The same CNBC report also mentioned that 54% of Americans carry a credit card balance over to the next month. Half of those people have been in credit card debt for at least a year. This underscores the idea that once you get into credit card debt, it’s a battle to get out of it.

5. Having $5,000 in credit card debt can take up to 16 years to repay.

CNBC notes that the average person with credit card debt owes roughly $5,525. Making just the minimum payments, the average person will be in debt for 16 years if no additional charges are made. During that time, you will pay more than $6,000 in interest.

6. Only 1.6% of Americans have a perfect credit score.

A perfect credit score is 850, according to all three credit bureaus. Sources show that only 1.6% of Americans, or about 3.3 million people, have reached this level. But does a perfect score even matter? 

Experts say no — credit scores of at least 760 or above will still get you many of the benefits that perfect score holders enjoy, such as 0% interest credit cards, favorable loan terms, and rewards cards. Don’t stress yourself aiming for perfection. Just focus on raising your score as high as you can.  

7. As a whole, Gen Z has the lowest average FICO score (674), while the ‘silent’ generation has the highest (758).

In this report, we noticed an interesting trend. Here’s the breakdown they gave for average FICO scores based on generational age groups:

  • Gen Z: 674
  • Millennials: 680 
  • Gen X: 699
  • Baby Boomers: 736
  • Silent Generation: 758

With each generation, credit scores tend to get a little better. That’s likely due to having more time to learn about financial wellness and having more time to build a solid credit history. Plus, as Americans age, they may have fewer big purchases to make (e.g., homes, cars, etc.).

The key takeaway: if your credit score isn’t where you want it to be right now, don’t stress. Improving your score takes time, and with due diligence, it will get better!

8. 26 million Americans are ‘credit invisible.’

Being credit invisible means you have no credit history and no credit score. In addition, 19 million Americans have a stale credit history, which means there isn’t enough recent data available to produce an accurate credit score. 

If you don’t need credit now, that’s great! But building a healthy credit score now can certainly help out if you need to rely on credit in the future. If you are credit invisible or credit “stale,” make it a goal to start building up your credit profile.

9. Only 21% of Americans check their credit score each month.

Your credit score will change over time. It may improve; it might decline. The only way to know for sure is to be proactive about checking your credit score. If you’re trying to raise your credit score, checking it monthly can help you connect the dots on how your payments and activities each month affect your score (in either direction). 

Even if you’re making timely payments each month, never assume that this will be enough to put you in your desired score range. There are many factors that influence your credit score (payments are just part of the puzzle), so start making it a habit to check your score on a regular basis.

The credit landscape is always changing. We’re helping you keep up with the industry and giving you the best tips and tricks to take control of your financial well-being. For more insights, head back to our blog or explore our free credit resources.

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