Experian’s State of Credit report shows the nation’s credit scores are up and bankcard and retail card lending is growing
Fifth annual analysis provides insight into how the nation is faring as a whole as well as which cities are ranked the top and the bottom
Costa Mesa, Calif., Nov. 18, 2014 — Experian®, the leading global information services company, released key findings from its Fifth Annual State of Credit study today showing that as the nation climbs further out of the recession, credit scores and card lending both have experienced different and more positive signs of growth since 2013. While these categories are showing upward growth, fewer people have opened a new mortgage in the past year. Some of the highlights of the study include the following year over year changes:
•The national VantageScore® credit score1 is up by two points, from 664 to 666
•Bankcard lending is on the rise, with new bankcards up 21.1 percent, with one in 17 consumers opening at least one bankcard (compared with one in 21 consumers in 2013)
•The average number of bankcards per person is up 4.2 percent to 2.18 cards
•Retail card lending also is on the upswing with a 3.5 percent increase
•The average number of retail cards is up 6.7 percent to 1.54 cards per consumer
•Average debt2 is up 2.3 percent to $28,496 per person
•Mortgage originations are down by 39 percent, with one in 79 households securing a new mortgage (compared with one in 48 in 2013). Projections show originations increasing 6.8 percent from Q2 to Q3 in 2014.
“This has been a notable year for borrowing, with more new credit being extended and consumers feeling more comfortable and confident about accepting those credit offers,” said Michele Raneri, vice president of analytics, Experian. “Even with some categories like mortgage taking longer to bounce back, an early glimpse at our third-quarter data indicates that an upward trend may be on the horizon.”
The study not only examined the national credit picture, but also looked at more than 100 Metropolitan Statistical Areas (MSAs) across the country and compared their credit scores with one another to see how they are faring. Topping the list with an average credit score of 706 are the residents of Mankato, Minn., followed by three other Minneapolis cities securing top spots. The city in need of the most improvement is Greenwood, Miss., with the lowest credit score of 609. The full list of the top 10 and bottom 10 cities are featured below. Scores are rounded to the nearest whole number.
Top 10 highest average credit scores by city
Bottom 10 lowest average credit scores by city
Other key highlights of the top and bottom cities:
•Forty percent of the top 10 cities are in Minnesota.
•Mankato, with its credit score of 706, is the highest in the country and is 40 points higher than the U.S. average of 666. Mankato residents increased their score by 3 points compared with 2013.
•Sioux Falls went down one point, which makes it the only city in the top 10 to decrease its score from last year.
•Of the bottom 10 cities, Albany had the largest score increase over the last year. Its residents increased their score by five points, from 616 to the current 621.
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.
“While this study compares cities’ scores with one another, it is important not to focus too much on the number,” said Rod Griffin, Experian director of public education. “Experian analyzes vast amounts of consumer credit and macroeconomic data to help understand the how consumers across the nation are managing credit, educate people about how reports and scores work and, most importantly, for the good purpose of encouraging people to make positive changes in the way 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 manage their credit reports and credit scores better. To connect with Experian and learn more about credit, see below:
•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. 4 at 3 p.m. Eastern time to chat about the study and its findings. Register at http://www.wisebread.com and follow #wbchat.
•Visit Experian’s help site for answers to common questions, advice and education about consumer credit.
•Consumers are welcome to ask their credit questions on our Facebook page at https://Facebook.com/ExperianUS.
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.
1 VantageScore range is 300-850
2 Average debt for this study includes all credit cards, auto loans and personal loans/student loans.
Experian Public Relations
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VantageScore Solutions, LLC (www.vantagescore.com) is the independently managed company that owns the intellectual property rights to the VantageScore credit scoring models, including VantageScore 3.0 model which provides up to 25 percent predictive improvement over earlier models and has the ability to formulate a score for 30–35 million previously unscoreable consumers. To read more about VantageScore, please visit www.vantagescore.com.
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
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, 2014, was US$4.8 billion. Experian employs approximately 16,000 people in 39 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.