Men Vs. Women In Credit

Which Gender Has Superior Credit Habits?

Men Vs. Women In Credit
April 5, 2017

According to the Bureau of Labor Statistics, women earned 81.1 cents for every dollar that men earned in the fourth quarter of 2016. While men may have a wage advantage, a 2016 survey from Experian suggests that men are poorer at financial management and credit skills — thus men may be squandering their advantage.

The Experian survey looked at multiple aspects of credit and money management and generally found women to have superior habits. Women had an average credit score of 675 on the VantageScore system, five points above the average score for men — even though women averaged 23.5% more open credit card accounts than men do.

The revolving utilization ratio (average amount of total available revolving credit being used) was 26.2% for women compared to 27.3% for men. Men are using more of their available credit on fewer credit cards, contributing to the lower credit score by raising their overall credit utilization. Using a higher portion of your available credit sends a signal to debtors that you are at higher risk of failing to make payments.

Collective debt statistics favor women as well. Experian found that the average woman's debt was $26,610, significantly below the average man's debt of $27,627. Men were also more likely to make bigger purchases — for example, with respect to automobile purchases, women tended to make more sensible and functional choices, while men gravitated toward sports cars and pickup trucks. The results imply that women are more interested in getting a car that meets their needs, while men are willing to spend more money on a vehicle that makes a statement.

Do men fare any better with respect to mortgages? Score another victory for the ladies. Men have a higher average mortgage loan amount (with respect to origination) at $231,089, compared to $212,912 for women. Women are also better at making their mortgage payments, with a 0.79% delinquency rate compared to 0.86% for men. Given that even a single missed mortgage payment can have a significant effect on your credit score, this finding is consistent with men's lower average credit score.

Another possible component of the problem was revealed by a different 2016 survey from CardRatings. While only 45% of women considered their current credit score to be excellent, 58% of men felt that way. Does that mean that women are more critical of their credit scores while men are less likely to care? Perhaps both are true — but given that the average scores in the Experian survey fall considerably short of the traditional "excellent" range of 750 or above, it's more likely that men have a looser definition of excellent.

To all of you males who do have inferior credit scores and the perspective to realize that they really are inferior, don't sulk about your credit scores — do something about them. Adam Carroll, Founder and Chief Education Officer of National Financial Educators, reminds us: "Your credit score is hugely important when it comes to making major life decisions." The stakes are significant, so why not take charge and work on improving your credit score?

If you need further motivation to act now, consider the words of Greg McBride, Chief Financial Analyst at Bankrate.com: "The beauty of credit scoring is that it gives greater emphasis to current events and less emphasis on previous missteps with each passing day."

Still not convinced? Remember that the women in your life now have collective bragging rights with respect to credit and money management. Start working on your credit score now. Don't contribute to your gender falling short again on the next survey. And ladies, keep up the good work!

You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.


Photo ©iStockphoto.com/lolostock

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Erin | 04.05.17 @ 15:38
I would like to see the details behind some of these scores. For example, do women have lower mortgage loan amounts simply because they do not have the same salaries as men and can't qualify for higher loans or is there something else going on? I'm not going to knock men about their debt when the numbers for both seem to be very similar, really. When it's all said and done, just about all of us could be working to improve our credit scores.
Nancy B | 04.05.17 @ 17:08
I find the statistics interesting. I wonder what the reasons behind the statistics are. Do women just have a natural ability in this area? Or is it because they are normally the ones that do the household budget therefore they've learned?
Carla | 04.05.17 @ 17:14
It is a bit upsetting that women make less than men by that high a percentage. Maybe having less money to work with contributes to buying less therefore helping our credit scores. Either way, kudos that we came out on top despite the disadvantage of earning less.
Zanna | 04.05.17 @ 17:54
What are the percentages for loan approvals for men, vs. women though? I suspect that the men are approved more quickly, for larger amounts, which would seem to validate their feelings that their credit ratings are "fine" even when they're not as high as a woman's..
Brittany | 04.05.17 @ 19:13
This was actually really interesting , id like to see the souces that this came from just because i always find things like this to be really interesting. More so that men make larger purchases than women.
Daniel | 04.06.17 @ 14:15
The ongoing battle of the sexes. Always interesting to see things like this broken down, and obviously it is a per person kind of thing. Have to say I am not really sure asking people their opinions on score constitutes them being better or worse but funny how it broke down.
Chrisitna | 04.07.17 @ 16:35
The difference in how men and women use credit cards and manage them is definitely true in this house. My husband has fewer cards and carries higher balances, which knocks his available revolving credit way down!
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