Average Credit Score Hits New High, While Debt Balances Rise

Quick Answer

  • The average credit score in the U.S. hit a record high of 714 in the third quarter of 2021, a 4 point increase from 2020.
  • The average debt balance increased by 3.9% to $96,371 in 2021, a $3,644 jump.
  • Auto loans, mortgages, personal loans and student loan balances continued to grow throughout 2021.
  • Average credit card and HELOC balances declined for the second consecutive year.
Five people are checking their phones with different types of credit data graphics above them on an orange wall.

Americans faced more than the usual economic challenges in 2021, but appeared to be on solid footing, based on an analysis of Experian consumer credit data. Consumer credit scores remained strong, with the average score climbing up a few points, and those who carried credit managed to keep utilization steady and avoid piling up late payments.

It's a notable feat considering average balances for mortgages, auto loans and personal loans increased as the price of homes, vehicles and other goods and services became costlier over the same time period. Increases in average debt levels were more modest for federal student loan borrowers, who saw interest on their loans paused throughout the pandemic. The only declines were observed in the relatively small home equity line of credit (HELOC) market, where balances have been declining for a number of years.

Delinquency rates have continued to remain relatively low and credit utilization has stabilized, indicating that consumers generally aren't overextending themselves when they borrow for purchases. Improvements like these add to consumers' overall credit health and can cause scores to rise in a short period of time.

As part of our ongoing analysis of credit and debt in the U.S., Experian reviewed credit report data to see how consumers' credit scores have changed over the past year and to understand what impact the pandemic has had on credit thus far. This analysis compares data from the third quarter (Q3) of 2020 with Q3 2021.

Average Credit Score in the U.S. Reaches a Record High

From Q3 2020 through Q3 2021, the average FICO® Score in the U.S. increased by four points to 714. In 2021, 71% of Americans had a "good" credit score of 670 or greater, based on the FICO® Score 8 credit score model.

Snapshot: Consumer Credit and Debt
2020 2021 Change
Average FICO® Score 710 714 +4 points
Average total debt balance $92,727 $96,371 +3.9%

Source: Experian data from Q3 of each year

Additionally, the average debt balance increased by 3.9% to $96,371 in 2021, a $3,644 jump. Mortgage and auto loans account for most of the increase for consumers.

Credit Utilization and Delinquency Remain Steady

Average credit card balances fell by 1.8% in 2021, a slowing of what was a larger decline in balances from Q3 2019 through Q3 2020, when balances fell by 14%. The decline in balances and thus credit utilization may represent some residual uncertainty by consumers as they navigate a new economic landscape. The pandemic has dramatically changed not only how and where consumers use their credit cards, but also the price they'll pay for certain items impacted by inflation.

Snapshot: Consumer Credit Utilization
2020 2021 Change
Average credit card debt $5,315 $5,221 -1.8%
Average credit utilization 25.3% 25.6% +0.3 percentage points (+1.2%)

Source: Experian data from Q3 of each year

Despite increased costs for goods and services, credit utilization remained virtually unchanged in 2021. This indicates that, on average, consumers are managing their credit limits well, and lenders are still willing to extend credit to them.

Snapshot: Payment Delinquency in the U.S.
2020 2021 Change
% of accounts 30-59 days past due 0.98% 1.04% +6.1%
% of accounts 60-89 days past due 0.58% 0.58% 0%
% of accounts 90-180 days past due 0.37% 0.34% -8.1%

Source: Experian data from Q3 of each year

Delinquency rates in 2021 remained relatively steady compared with 2020, and are at levels typical of economic expansions. Accounts 30 to 59 days past due increased to 1.04% in 2021, 0.58% of accounts were 60 to 89 days past due (the same as in 2020) and 0.34% of accounts were 90 to 180 days past due.

Average FICO® Score Increases for Fourth Consecutive Year Despite Pandemic

Average FICO® Scores increased for the fourth consecutive year in 2021. While not as large as last year's eight-point increase, this year's four-point increase was enough to pull even more U.S. consumers into the "good" credit score range. In fact, 71% percent of Americans had a credit score of 670 or greater in 2021, versus 69% in 2020.

FICO® Scores Continue to Increase in All States and Washington, D.C.

For the second consecutive year, residents of all 50 states and Washington, D.C., increased their average credit score. As is typical with other average FICO® Score metrics, states with previously lower average scores tend to demonstrate larger year-over-year increases than states with higher than average credit scores.

Average FICO® Score Increase by State
2020 2021 Change
Alabama 686 691 +5 points
Alaska 714 717 +3 points
Arizona 706 710 +4 points
Arkansas 690 694 +4 points
California 716 721 +5 points
Colorado 725 728 +3 points
Connecticut 723 726 +3 points
Delaware 710 714 +4 points
District of Columbia 713 717 +4 points
Florida 701 707 +6 points
Georgia 689 693 +4 points
Hawaii 727 732 +5 points
Idaho 720 725 +5 points
Illinois 716 719 +3 points
Indiana 707 712 +5 points
Iowa 726 729 +3 points
Kansas 717 721 +4 points
Kentucky 698 702 +4 points
Louisiana 684 689 +5 points
Maine 721 727 +6 points
Maryland 712 716 +4 points
Massachusetts 729 732 +3 points
Michigan 714 719 +5 points
Minnesota 739 742 +3 points
Mississippi 675 681 +6 points
Missouri 707 711 +4 points
Montana 726 730 +4 points
Nebraska 728 731 +3 points
Nevada 695 701 +6 points
New Hampshire 729 734 +5 points
New Jersey 721 725 +4 points
New Mexico 694 699 +5 points
New York 718 722 +4 points
North Carolina 703 707 +4 points
North Dakota 730 733 +3 points
Ohio 711 715 +4 points
Oklahoma 690 692 +2 points
Oregon 727 731 +4 points
Pennsylvania 720 724 +4 points
Rhode Island 719 723 +4 points
South Carolina 689 693 +4 points
South Dakota 731 733 +2 points
Tennessee 697 701 +4 points
Texas 688 692 +4 points
Utah 723 727 +4 points
Vermont 731 736 +5 points
Virginia 717 721 +4 points
Washington 730 734 +4 points
West Virginia 695 699 +4 points
Wisconsin 732 735 +3 points
Wyoming 719 722 +3 points

Source: Experian data from Q3 of each year

While there were no double-digit jumps in FICO® Scores this year (as there were in 2020), four states—Florida, Maine, Mississippi and Nevada—increased scores by six points in 2021.

States With the Highest Average FICO® Score Increases, 2020-2021
2020 2021 Change
Florida 701 707 +6 points
Maine 721 727 +6 points
Mississippi 675 681 +6 points
Nevada 695 701 +6 points

Source: Experian data from Q3 of each year

The slowest growth in average credit scores by state occurred in Oklahoma and South Dakota, where scores increased by just two points.

States With the Lowest FICO® Score Increases, 2020-2021
2020 2021 Change
Oklahoma 690 692 +2 points
South Dakota 731 733 +2 points

Source: Experian data from Q3 of each year

While states with lower average scores typically see larger point increases than states with higher average FICO® Scores, and vice versa, in 2021 there was a little of each. So even though Maine, for example, already had a credit score well above the 2021 national average of 714, it still managed a healthy jump. Conversely, even though Oklahoma had one of the lower average scores, its increase was among the most modest last year.

The other states and Washington, D.C., fell somewhere in between, with a three-point average increase being the most common in 2021.

Every Generation Sees Average FICO® Score Increase

The increase in average credit scores in 2021 extended to all generations, with millennials and Generation X—the heart of the workforce—increasing their respective scores the most from their 2020 average.

Average FICO® Score by Generation
2020 2021 Change
Generation Z (18-24) 674 679 +5 points
Millennials (25-40) 679 686 +7 points
Generation X (41-56) 698 705 +7 points
Baby boomers (57-75) 736 740 +4 points
Silent generation (76+) 758 760 +2 points

Source: Experian data from Q3 of each year; ages as of 2021

Millennials and Generation X saw their average FICO® Scores increase by seven points in 2021. Generation Z, whose impact on the economy will grow as they continue to enter the workforce, increased their average by five points. Baby boomers, despite already possessing an average FICO® Score at least 30 points greater than that of younger generations, still managed to increase its average score by four points. The silent generation, those most mature in both age and credit history, saw the most modest increase of two points, to 760.

All of these average FICO® Scores are in the "good" credit score range or better by FICO's definition. The average scores of baby boomers and the silent generation are considered "very good" scores, and will typically entitle those consumers to lower interest rates on financing. Scores tend to improve as a consumer's credit history grows longer and they demonstrate their reliability to service the credit they've accessed.

U.S. Consumer Debt Snapshot

Changes in average debt levels by type of debt were more subdued than the changes seen in 2020, when average credit card balances declined by 14% and student loan balances grew by 9%. Auto loan, mortgage, personal loan and student loan balances continued to grow in 2021, while average HELOCs and credit card balances declined for the second consecutive year.

Change in Average Balance by Debt Category
Debt Type 2020 2021 Change
Credit card $5,315 $5,221 -1.8%
Personal loan $16,458 $17,064 +3.7%
Auto loan $19,703 $20,987 +6.5%
Student loan $38,792 $39,487 +1.8%
HELOC $41,954 $39,556 -5.7%
Mortgage $208,185 $220,380 +5.9%

Source: Experian data from Q3 of each year

Average Mortgage and Auto Loan Balances See the Fastest Growth

Home and auto prices, which directly impact two major components of many consumers' monthly expenditures, grew at the fastest rate in years in 2021. It's not surprising, then, that mortgage and auto loan balances increased significantly as well. While not as dramatic as the recent price jumps that occurred for home and auto inventory, the 6.5% jump in auto loan balances and 5.9% increase in mortgage balances are beginning to reflect some of the price increases already observed in the marketplace.

Starting with mortgages, the average balance of $220,380 in Q3 2021 represented a 5.9% increase over the previous year. While skyrocketing prices for new and existing homes were certainly a factor in the increase, record amounts of mortgage refinances in 2021 may also have contributed. Freddie Mac, a federally backed company that buys and sells home mortgage loans, reports that refinances saw a year-over-year increase of 33% in the first half of 2021, suggesting that an already-hot refinance market got even hotter last year.

Auto loan balances were even more volatile, increasing by 6.5% in 2021. Here, the explanation appears to be more straightforward than for mortgages: A protracted auto shortage has significantly driven up prices for all types of vehicles, and while the financing and rates of auto loans remained relatively stable in 2021, the larger loans seem to reflect the premiums many carbuyers have paid, as car inventories remain at historic lows.

Credit Card Balances Stabilize to Level Lower Than 2020

U.S. consumers carried an average credit card balance of $5,221 in 2021; that's 1.8% lower than last year. While not as steep as the decline seen in early 2020 when consumers slashed certain spending as the pandemic began, it's still trending downward.

There's likely more than one factor driving the decline:

  • Consumers eligible for relief programs may have used stimulus payments to pay down some or all of their revolving debt if they didn't experience a drop in income during the pandemic.
  • Holiday spending in 2020—the first year of it occurring when many areas were still under various pandemic restrictions—was muted compared with prior years.
  • Recent evidence from the Federal Reserve Bank of New York suggests that consumers with credit cards are carrying lower balances than in previous years.

As noted above, delinquency rates on credit cards remain muted, indicating that despite possible changes in consumer habits, the economic health of consumers appears to be generally stable.

Personal Loan Balances Continue to Grow

Personal loan balances grew by 3.7% to $17,064 in 2021. The rebound occurred after an initial period of uncertainty in mid-2020, when personal loan lenders temporarily tightened credit. Still, the increase is modest compared with prior years, when personal loans were consistently the type of loan that saw the greatest growth.

Typically designed as a lump-sum loan to be repaid over a three- to five-year period, personal loans are often used by consumers to either finance big-ticket items, like vacations or weddings, or to consolidate existing debts at a more favorable rate.

While personal loan rates remained low for borrowers with very good or better credit scores, some potential borrowers may still be on the sidelines, waiting for the opportunity to be able to safely set a wedding date or plan a long vacation before taking a personal loan.

Student Loan Balance Growth Slows

Student loan balances typically grow by a steady 4% to 6% annually, and are a much less volatile measure of household debt than other loan types. While the average student loan borrower owes $39,487, that balance grew just 1.8% from Q3 2020 through Q3 2021. Paused interest accrual on existing student loans, which was in force throughout the 12-month period, kept a lid on much of the increase—even as a record number of borrowers entered forbearance plans and temporarily stopped making payments.

HELOC Balances Continue to Dip Despite Significant Home Equity

Average balances of home equity lines of credit (HELOCs) fell again in 2021, as homeowners eschewed using their home equity to establish new credit lines to either renovate their homes or otherwise manage household finances, and existing borrowers from previous years paid off what was left of their HELOC balances. With little new HELOC origination to replace the existing loans, balances have consequently declined.

What May Be in Store for 2022

More Interest Rate Hikes

The Federal Reserve has already started a measured series of interest rate increases designed to tame increasing inflation, which reached 40-year highs in 2022. This series of hikes will cascade through the financial system, increasing the borrowing rates for credit cards, personal loans and mortgages by varying degrees.

Rate increases, in turn, have the potential to slow the rise of housing prices. The Fed increases are already impacting mortgage rates: The average conventional 30-year mortgage rate exceeded 5% in April 2022, the highest it's been since 2010. And even though housing supply is still limited, prospective new homebuyers won't be able to qualify for homes they otherwise might at lower rates. This could slow down the double-digit home price increases in some markets as more buyers are priced out of the market.

Shifts in Refinancing

Generally, when consumers refinance existing debt, a primary objective is to either lower monthly payments or the interest they pay. In an environment where rates are rising, some types of refinancing may become less enticing, while others may gain more prominence. For instance, when mortgage rates were falling, some homeowners found they could refinance their existing 30-year mortgage to a shorter 15-year mortgage, and monthly payments would not increase. This allows owners to build their home equity faster.

Today, where the challenge is the opposite, we may begin to see mortgages with longer terms, such as 40 years. This might allow some potential homeowners into the marketplace with a monthly mortgage payment that's affordable.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.

FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.