Gender Gap in Credit Scores: Perception vs. Reality

Gender Gap in Credit Scores: Perception vs. Reality

Think women have worse credit than men? Think again. Here's the real scoop:

  • Women's average credit score: 675
  • Men's average credit score: 670

But here's the kicker:

  • 16% of women think they have poor credit
  • Only 10% of men think the same

Why the disconnect? It's all about confidence, not numbers.

Quick Comparison:

Factor Women Men
Avg. Credit Score 675 670
Total Debt $310,004 $337,957
Mortgage Debt $192,368 $211,034
Credit Cards 4.5 3.6
Think Credit is Poor 16% 10%

Bottom line: Women are credit champs but don't know it. This mindset gap could be holding them back from better financial opportunities.

Let's dig into the real gender gap in credit scores and what it means for your wallet.

Men's Credit Scores

Men's average credit score in 2020 was 705 - "Good" on the FICO scale. That's almost the same as women's 704 average.

But here's where it gets interesting: men typically have more debt.

Debt Type Men Women Difference
Total Debt $337,957 $310,004 $27,953
Mortgage $211,034 $192,368 $18,666
Auto Loan $20,645 $17,747 $2,898
Credit Card $6,357 $6,232 $125

Surprisingly, men have fewer credit cards (3.6) than women (4.5).

So, men carry 9% more debt but maintain the same credit score as women. How? They might be managing their higher debt loads well - paying on time and using credit smartly.

Since 2015, both genders' scores have gone up by 10 points.

Experian found that "A third of consumers with a 705 FICO credit score had late payments (30 days past due), 42% had an auto loan, and 29% had a mortgage."

Even with a "Good" score, there's still room to improve those payment habits.

2. Women's Credit Scores

Women's credit scores tell an interesting story. Let's dive in:

Age Group Women's Avg. Score Men's Avg. Score
21-30 762 768
31-40 785 793

These VantageScore 2.0 numbers show women slightly trailing men in credit scores. But why?

Debt plays a role. Women aged 31-40 carry an average debt of $82,273, while men owe $78,673. More debt can drag down scores.

Payment issues are another factor. In the 21-30 group, 29.3% of women have been late on payments, compared to 25.5% of men.

Here's the kicker: women often think their credit is worse than it is. 16% of women believe they have poor credit, but only 10% of men think the same.

Martin Lynch from Cambridge Credit Counseling weighs in:

"People often imagine their credit is worse than it is because they're embarrassed about past mistakes, especially missed payments."

Want to boost your credit score? Try these:

  • Pay bills early
  • Keep card balances low
  • Don't close old cards
  • Check for credit report errors
sbb-itb-4efb34a

Good and Bad Points

The gender gap in credit scores shows some interesting trends:

Aspect Good Bad
Credit Scores Women: 675 (avg)
Men: 670 (avg)		 16% of women think they have poor credit vs 10% of men
Debt Levels Women's overall debt: $310,004
Men's overall debt: $337,957		 Women's student loan debt: $36,131
Men's student loan debt: $35,188
Credit Cards Women: 4.5 cards (avg)
Men: 3.6 cards (avg)		 More cards can mean more debt if not managed well
Historical Context Equal Credit Opportunity Act (1974) improved women's credit access Before 1974, women faced major credit hurdles

Women often manage credit better than they think. But there's still a perception gap. As Martin Lynch from Cambridge Credit Counseling says:

"People often imagine their credit is worse than it is because they're embarrassed about past mistakes, especially missed payments."

This mindset might stop women from grabbing better financial chances. But the upside? Women generally have less debt (except for student loans), hinting at smarter money management.

Before 1974, women needed men to cosign loans. We've come a long way, but those old inequalities might still affect women's financial confidence today.

Wrap-up

The gender gap in credit scores isn't what you might expect. Here's the real deal:

Aspect Women Men
Average Credit Score 675 670
Think Their Credit is Poor 16% 10%
Average Debt $25,095 $26,227
Average Mortgage $178,140 $187,245
Late Mortgage Payments 5.3% 5.7%

Surprise! Women have slightly better credit scores. But here's the kicker: they're MORE likely to think their credit is bad. This mindset could be holding women back from grabbing better financial opportunities.

Martin Lynch from Cambridge Credit Counseling drops some knowledge:

"People often think their credit is worse than it is because they're embarrassed about past mistakes, especially missed payments. It's not just about not understanding credit scores."

This might explain why 58% of men think their credit score is excellent, but only 45% of women do.

The numbers don't lie - women are credit champs:

  • Less overall debt
  • Smaller mortgages
  • Fewer late mortgage payments

But it's not all roses. Women earn about 23% less than men (ouch!) and carry more student loan debt. That makes building credit tougher.

Bottom line: This isn't just about numbers. It's about financial confidence and grabbing opportunities. Understanding these differences can help everyone make smarter money moves and close that perception gap.

FAQs

Does gender impact credit score?

Nope. Credit scores don't care if you're a man or a woman. It's all about how you handle your money.

Here's the deal:

  • The Equal Credit Opportunity Act of 1974 put an end to gender-based credit discrimination.
  • In 2020, men and women had nearly identical average credit scores: 705 and 704, respectively.
  • Both genders carried similar levels of credit card debt.

Does your gender affect your credit score?

Not directly. But there are some financial differences between men and women that might indirectly impact scores:

Factor Men Women Difference for Women
Total debt $337,957 $310,004 -$27,953
Mortgage debt $211,034 $192,368 -$18,666
Student loan debt $35,188 $36,131 +$943
Number of credit cards 3.6 4.5 +0.9

Michele Raneri from Experian points out:

"There were several gaps between men and women in this study, including the five-point credit score lead that the women hold."

These differences? They're not because of gender itself. It's more about broader economic factors that affect men and women differently.

Related posts

Back to blog