Consumers in Top Credit Ranges Have Highest Debt

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Many people assume that having a lot of debt means having a low credit score. But that's not always true.

When it comes to credit scores and debt, people in the top credit score range—those with average FICO® Scores of 800 to 850—actually carry more debt than consumers in any other credit score range, according to Experian data from the second quarter (Q2) of 2019.

As part of our ongoing look at credit in the U.S., Experian surveyed 362 people to see how they thought high debt impacted credit scores. For this analysis, we compared survey responses with national consumer credit data to see if consumers' feelings about debt and credit matched up. Read on for our insights and analysis.

Most Consumers Believe High Debt Equals Low Credit Scores

Overwhelmingly, survey respondents—80%—said they believe that having high debt would hurt credit scores.

Similarly, they thought people with top credit scores would carry less debt than people with lower scores: 51% believed people with a score between 740 and 850 would have less debt than people with scores at the lower end of the scoring scale (300 to 670). Just 29% thought people with higher scores would have more debt.

Consumers With Top Credit Scores Have Higher Average Debt

When looking at average debt compared with FICO® Score ranges, the trend is clear: As credit scores get higher, total debt grows. People with average FICO® Scores in the "exceptional" range of 800 to 850 have the highest average total debt, carrying $136,801 in Q2 2019, according to Experian data.

Credit Ranges and Debt
Credit RangeAverage Total DebtAverage Credit Score

*Source: Experian Q2 2019 data

Credit scores and the ranges they fall in are important factors when taking on new debt. Often, people in lower credit score ranges have trouble obtaining new loans. People in the lowest credit range, with scores from 300 to 579, carried $38,324 in total average debt in Q2 2019, according to Experian data. That's less than one-third of the total debt carried by consumers in the top credit range and could indicate the difficulty these consumers experience when applying for loans or credit cards.

But while lower credit scores can be a barrier to taking out new credit, the trend also shows that once you have high debt amounts, it's possible to simultaneously maintain a good credit score.

States With Highest Average Debt Have Above Average Credit Scores

The five states where consumers carry the most debt also have average or above average FICO® Scores. The average FICO® Score in the U.S. was 703 in Q2 2019, and the total average debt carried by American consumers was $92,479.

Five States With the Highest Average Debt
StateAverage Total DebtAverage Credit Score
District of Columbia$147,139703

*Source: Experian Q2 2019 data

American Cities With the Most Debt Carry High Credit Scores

Among the states and cities with the highest debt amounts in the U.S., average FICO® Scores were consistently average or above average. In some cases, cities with top debt even had average FICO® Scores in the top 10% of all cities in the U.S. This trend was also true for individual consumers across the country.

Two of the five cities with the highest average debt—Danville and San Ramon, both in California—had average FICO® Scores in the top 10% of any city in the country.

Five Cities With the Highest Average Debt
CityAverage Total DebtAverage Credit Score
Beverly Hills, CA$364,545728
Danville, CA$351,812770
San Ramon, CA$273,498758
Encino, CA$260,797734
Newport Beach, CA$249,281724

*Source: Experian Q2 2019 data

While high debt amounts are not a requisite for having a good credit score, these data findings show that if you properly manage debt, it doesn't have to bring your credit score down.

Paying on Time Is Key to High Credit Scores

While survey respondents thought debt played a serious role in credit scores—many even thinking it had a negative effect—36% reported they felt carrying debt was not problematic as long as all payments were made on time.

Indeed, no credit score can reach the top range if a borrower doesn't pay their bills on time. Payment history is the most important aspect of calculating a credit score, and even one late or missed payment can have a serious impact on scores. Borrowers looking to manage a high amount of debt while maintaining a good score can do it as long as they make all debt payments on time and know all the factors that affect credit scores.

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.