Experian's State of Credit study provides U.S. credit report card
Sixth annual analysis shows national credit score is up, lending is increasing and late payments are down
COSTA MESA, Calif., Nov. 18, 2015 /PRNewswire/ -- Experian®, the leading global information services company, today released key findings from its sixth annual State of Credit study which provides national insights, ranks top and bottom cities, and introduces a new element, of political preference of ranked cities. The report shows that the national credit score increased by three points over the last year (and by five points since 2013) and the 10 cities with the highest credit scores in the nation increased their scores by an average of 1.8 points. Additionally, bankcards, retail cards and mortgage lending showed significant growth, making this year's study an indicator of the nation's confidence in the credit market.
"If I were to give a grade to the overall picture of credit in the United States, I would give it an A minus. I'm optimistic about the state of credit as we are seeing more loans being extended, late payments are decreasing and consumers are continuing to gain more confidence in originating loans," said Michele Raneri, vice president of analytics and new business development, Experian. "There definitely is growth and momentum -- we're back to prerecession levels in nearly every category, which means lenders are in a prime position to capitalize on this market and foster business growth."
Detailed study highlights include the following changes over the last year:
The national VantageScore® credit score1 is up by three points, from 666 to 669.
Bankcard lending continues to increase, with new bankcards up 7.7 percent.
The average number of bankcards per consumer is up 2.8 percent to 2.24 cards.
Retail card lending also is on the rise, with a 10.8 percent increase in new originations.
The average number of retail cards per consumer is up 0.3 percent to 1.55 cards from last year and up by 7 percent since 2013.
Instances of late payments (includes bankcard and retail) decreased by 4.4 percent over the last year and by 17.3 percent since the height of the recession in 2010.
Average debt2 is up 2.1 percent to $29,093 per consumer.
Mortgage originations increased by 42.5 percent.
1 VantageScore range is 300-850.
2 Average debt for this study includes all credit cards, auto loans, and personal loans/student loans.
This study also provides an in-depth look at more than 100 metropolitan statistical areas (MSAs) across the country and compares average credit scores to see how these cities are faring. As in previous years, Minnesota continues to top the charts with three of its cities -- Mankato, Rochester and Minneapolis -- leading with credit scores of 706, 705 and 704, respectively. Two cities have moved out of the bottom 10: Bakersfield, Calif., and Columbus, Miss. While still at the bottom of the list with a score of 612, Greenwood, Miss., residents did improve their score by three points, more than any other city in the bottom 10.
With an election year upon us, this year's report also provides insight into how residents of these top and bottom MSAs identify politically. The study found that half of the highest-scoring cities have residents whose views skew more middle of the road, while residents of lower-scoring cities are more likely to lean conservative. The full lists of the top 10 and bottom 10 cities are featured below (scores are rounded to the nearest whole number).
Other key highlights about the top and bottom cities:
- Every city in the top 10 increased its average debt, with Rochester, Minn., increasing the most by 5 percent since 2014.
- Mankato, Minn., with its credit score of 706, is the highest in the country and is 37 points higher than the U.S. average of 669.
- All the top 10 cities have revolving utilization lower than 26 percent.
- Of the top 10 cities, Sioux Falls, S.D., had the largest credit score increase (39 percent).
- Shreveport, La., and Monroe, La., are new to the bottom 10 this year.
- Every city in the bottom 10 improved its score over the last year, with the exception of Monroe, La., which remained the same.
- All the cities in the bottom 10 increased their utilization over the last year.
For a more complete look at the above cities as well as the other MSAs studied, visit http://www.livecreditsmart.com to view a fully interactive map and infographic.
"Knowing where you stand from a credit perspective is critical to improving or maintaining your financial well-being. Everyone should understand the value of having positive credit references," said Rod Griffin, Experian's director of public education. "Reports like this one provide an avenue to build awareness and help consumers across the nation think about how they can make positive changes in how they manage credit."
Additional data and educational resources
For more than 20 years, Experian has been committed to improving consumer financial literacy and is dedicated to providing products and services that help consumers to better manage their credit reports and credit scores. To chat with Experian live and learn more about credit:
- Join the #CreditChat, hosted by @Experian_US on Twitter with financial experts and consumers every Wednesday at 3 p.m. Eastern time.
- Experian is sponsoring a tweetchat with @Wisebread on Dec. 3 at 3 p.m. Eastern time to chat about the study and its findings. Register at http://www.wisebread.com and follow #wbchat.
In addition to helping consumers, Experian can help organizations make highly informed and data-rich decisions based on consumer credit trend behavior and can find, segment, score and grow key populations. With this type of intelligence, Experian can assist in providing clients with the tools to provide credit insight to their customers and help stress the importance of credit education, which is an essential and helpful benefit to the lender and the consumer.
The consumer analysis is based on a statistically relevant sampling of Experian's consumer credit database and the Q2 Experian–Oliver Wyman Market Intelligence Reports. Analyzed credit files did not contain personal identification information. Political outlook insights are sourced from data collected for Experian Marketing Services' trusted Simmons® National Consumer Study (NCS). To obtain local market estimates, Experian Marketing Services, using a patented process, first develops a GeoBehavioralSM fingerprint for every U.S. Census block group. The most recent Simmons NCS survey respondents are then compared and scored to the GeoBehavioral fingerprint of each block group. Respondents are weighted to represent the population in that block group based upon the comparison score and rolled up to subsequent geographies within markets.
We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making.
We also help people to check their credit report and credit score, and protect against identity theft. In 2015, we were named by Forbes magazine as one of the "World's Most Innovative Companies."
We employ approximately 17,000 people in 38 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2015, was US$4.8 billion.
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VantageScore® is a registered trademark of VantageScore Solutions, LLC.