Experian Finds Americans Maintaining Healthy Credit Profiles During COVID-19 Pandemic

According to Experian’s latest State of Credit report, most Americans are responsibly managing their credit during the global COVID-19 pandemic by taking actions such as reducing credit card balances, late payments, and utilization rates.

“Against the backdrop of the pandemic, we are seeing promising signs of responsible credit management… especially among young consumers,” said Alex Lintner, group president of Experian Consumer Information Services. “Educating Americans about the factors included in their credit profile and how to manage these responsibly is of critical importance, especially on the road to economic recovery.” 

The 11th annual report found that Americans are holding fewer credit and retail cards, and less credit card debt in general, compared to 2019. The average credit card balance decreased from $6,629 to $5,897. Delinquency rates have also decreased year-over-year, and the average VantageScore was 688, a six point increase from 2019.

Retail spending, nonmortgage debt, and mortgage debt increased, but revolving utilization rates dropped four percent to 26 percent, according to the report. The most significant decreases were seen in Gen Z and millennial (Gen Y) borrowers. Gen Z borrowers saw a six percent reduction in their use of credit, and millennials  saw a five percent year-over-year decrease.

Though Gen Z and Gen Y are holding more credit cards, their balances and delinquencies decreased year-over-year. This incited a 13-point increase in average Gen Z credit scores and an 11-point increase in millennials’ average credit scores.

Credit scores are just one part of consumers’ credit profiles. “From buying a home to purchasing a new family car and much more, the types of purchases that are going to create meaningful change in consumers’ lives require a strong credit history,” said Rod Griffin, Experian senior director of consumer education and advocacy. “It is encouraging to see trends of responsible credit management for consumers of all ages.”

Click here for the full report. Experian’s analysis is based on a sampling of its consumer credit database.