6 Mortgage and Credit Statistics You Need to Know in 2020

By: , Contributor

Published on: Jan 28, 2020

Here's some eye-opening information about Americans' mortgages and credits. How do you compare?

Have you ever wondered how your mortgage balance or credit score compares to those of your peers? Well, now you don't have to. Experian did some digging to see how Americans fared financially in 2019, and here are some interesting takeaways based on recent data it compiled.

1. The average American has a $203,296 mortgage balance

Americans carried more housing debt in 2019 than they did in 2018 -- an average of $203,296, as opposed to $198,377 a year prior. Part of that could be a function of rising home prices. But also, as we'll see in a minute, Americans' credit scores have been rising, which may have opened the door to borrowing more.

2. Millennials represent just 15% of U.S. mortgage holders

Millennials have been slow to buy homes, largely because many people of that generation are saddled with leftover student debt from college. The fact that there's only been a limited number of starter homes on the market also explains why millennials represent just 15% of mortgage borrowers across the U.S. That said, the number of millennials with a mortgage has increased 76% in the past five years, which means younger adults are slowly but surely getting into the real estate game.

3. The average American's FICO Score is 703

The average consumer has a FICO Score of 703, up from 701 the year prior. While a general rise in credit is encouraging, it's worth noting that a score of 703 only falls into the "good" range, as opposed to "very good" or "exceptional." With a credit score of 703, you're likely to get approved for a mortgage (or another type of loan), but you won't snag the best rates out there.

4. 59% of Americans have a FICO Score above 700

Most Americans have a credit score that's considered "good" or better. This shows that consumers are getting wiser about maintaining solid credit -- namely, by paying more bills on time, keeping their revolving debt to a minimum, and being judicious about the type of debts they hold and the number of new credit accounts they apply for at once.

5. 16% of Americans have very poor credit

On the other hand, 16% of Americans have a FICO Score below 580. That's considered "very poor," and while you may qualify for a mortgage with a credit score in the 500s, you're apt to get stuck with a less favorable interest rate that makes homeownership a very expensive prospect for you. In fact, it pays to work on improving your credit score before buying a home if yours is currently in the dumps. In addition to the moves above, like being timely with bills, be sure to check your credit report regularly. Fixing errors that work against you could help that number improve.

6. Only 1.2% of Americans have perfect credit

It's not easy to attain a perfect FICO Score of 850, as evidenced by the fact that only 1.2% of U.S. consumers can make that claim. But the reality is that you don't need perfect credit to borrow money affordably, whether to buy a home or for another purpose. Once your credit score hits 800, you're propelled into "exceptional" territory, which means you're likely to not only get approved to borrow money but also to do so at the most competitive interest rate available.

Now that you have a sense of how much Americans are borrowing to own homes, who's taking out mortgages, and what consumers' credit scores look like, you can assess your own financial situation and see how it stacks up. And if you're not thrilled with what you see, work on improving your credit or taking steps to get ready to buy a home. The two, in fact, go hand in hand, so once your credit score improves, you'll be better positioned to apply for a mortgage.

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