Guest post by: Alayna Pehrson – Digital Marketing Strategist at bestcompany.com
One reason building and maintaining good credit is important is because it often serves as the sole proof of your financial stability. With good credit comes the ability to make larger purchases like a car or home, obtain a wider range of job opportunities, get lower interest rates on loans, etc. Millions of Americans strive to achieve good credit both in order to reap the benefits and progress in society.
But did you know that there are distinct ways in which credit can be affected by gender and age?
Men or Women: Who Has Higher Credit Scores?
According to a 2016 Experian study, there is a definite divide between men and women regarding their financial dealings. The report showed that, on average, women tend to have higher credit scores than men. Even though women were found to have more credit cards, their credit scores show that the greater number of cards doesn’t seem to have a negative effect on their credit standing. Recently, the average FICO score increased to 700, which suggests that both men and women are continually increasing their efforts of reaching higher scores.
The Role Gender Plays
Although credit scores do not reflect income levels, the gender pay gap seems to have an indirect correlation on credit between the two genders. Women currently make around $0.76 per $1.00 that men earn within the same job position. Due to the fact that men receive higher payments in the work force, they tend to have more money to spend, which typically results in men making larger, more significant purchases like cars, homes, or various luxury items.
Making large purchases wouldn’t have a negative affect if the purchases were paid off on-time and didn’t exceed the initial credit limit; however, this doesn’t seem to be the case. The Experian study provided that men made 8.1 percent more late payments on mortgages than women. Being late on large payments, such as mortgages, is something that can drastically lower your credit score, so it makes sense as to why men, on average, have lower credit scores than their female counterparts.
Gender Differences among Millennials
When looking at millennial men and women, it seems that millennial women still have higher credit scores; however, they are battling larger portions of debt than older female generations, as proved in the 2017 Lending Tree study. Millennial women may be struggling with more debt than their elders simply due to the rising number of younger women who are pursuing higher education levels which pushes them into student debt. It seems that millennial men still have significantly higher incomes than millennial women. According to the Lending Tree study, millennial women are more focused on saving money than millennial men as well.
How to Plan for a Future of Building Credit
Both men and women are on the rise with raising their average credit scores, which means that they have either developed good credit habits or they have repaired their credit by individual or professional means. In order for both genders to successfully and continually build good credit, they must understand which methods of credit building work and what to do if their credit score is falling below the average line. Credit repair is designed to allow you a second chance at having good credit and the benefits thereof. Doing your research on credit/credit repair and selecting professional credit repair services can help you get your credit where it needs to be in a relatively fast and easy manner.
Carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.
