Bad Credit Loan Statistics 2022-2021
- Only 11% of Consumers Have the Lowest FICO Scores
- 16% of Americans have bad credit
- 659,881 individuals have filed for bankruptcy in July 2020
- 19 million Americans have a stale credit history
- Average loans have fluctuated between $5,000 and $7,500 recently
- Generation Z has the lowest FICO score — 674 on average
- Outstanding loan debt increased by $18 billion in 2020
- More than 50% of loan applicants denied credit
Only 11% of Consumers Have the Lowest FICO Scores
Surprisingly few people make up the block of those with the worst credit scores. About 11% of consumers have the worst credit scores, and that raises the hope that you can change your score with relatively little effort and today’s score-raising offers. The more you learn about credit scores, the greater the opportunities for improving your credit. Exceptional credit scores are those between 800 and 850. Very good scores range between 740 and 799. Good scores are those between 670 and 739. Fair scores include the range between 580 and 669. Scores between 300 and 579 are considered to be very poor.
16% of Americans have bad credit
About 16% of American consumers have what’s termed bad credit, which is a score between 300 and 579. According to Experian, most people have fairly good credit, and they can always work to improve their scores. Better scores generate big benefits for consumers such as lower interest rates, opportunities for better jobs and easy qualification for getting a lease or mortgage on your own terms. Being denied credit doesn’t necessarily mean that you have bad credit. It just means that you failed to qualify for one lender’s standards. Those with lower scores tend to face many more challenges than those with higher credit scores. They might have problems getting approved for a low-interest loan or mortgage.
659,881 individuals have filed for bankruptcy in July 2020
Getting on top of your credit score becomes increasingly important in today’s business environment. The U.S. banking system pretty much requires that you maintain adequate credit to qualify for a bank account and get access to bank credit. Loans from institutional creditors are essential for financing college educations, lading a low-interest mortgage and even buying a car. Failure to repay a loan as agreed can ruin your credit and result in fighting daily for simple accommodations like paying bills online.
19 million Americans have a stale credit history
Unfortunately, a bad credit score can cost you thousands of dollars in interest charges, higher insurance rates and deposits for utility services. Life’s biggest purchases almost always require financing for things like securing a home mortgage, financing a vehicle and funding college educations. Higher credit scores show that you’re a responsible person who pays back loans on time. One survey determined that getting a vehicle with a “fair” credit score would cost a borrower $7,471 more than a person with a “very good” score.
Average loans have fluctuated between $5,000 and $7,500 recently
The pandemic has affected personal loans and credit offers in many ways. Economic uncertainties have forced borrowers to tighten their loan qualifications, which often makes things difficult for families trying to survive. Lenders are just now beginning to loosen their loan approval requirement. That provides opportunities for raising your credit. Many local merchants are offering consumers a chance to pay for items in installments. However, you should be wary about using store credit for anything but larger purchases. It’s easy to go deeply in debt when every store is offering some kind of credit terms.
Generation Z has the lowest FICO score — 674 on average
Credit stats are useful for comparisons so that you know where you stand. Generation Z has the lowest credit score of all age-based population groups — an average score of 674. 16% of people have very poor FICO scores, but 21% of U.S. citizens have exceptionally good credit. Your first step in comparing your score is getting your score from the three most important credit reporting agencies: Equifax, Experian, and TransUnion. Check your score for any inaccurate or expired information. Your credit can easily be damaged by people committing identity theft and getting unauthorized credit in your name.
Outstanding loan debt increased by $18 billion in 2020
Personal Loan Debt Statistics During The Pandemic A Forbes study found that Covid-19 created economic turmoil for many families and financial problems for most people. Personal loan rates during the pandemic actually fell. Personal loan indebtedness slowed while big-ticket debts increased by $18 billion. Loan balances increased an average of $199 for each borrower. Consumers opened 3.2 million new credit accounts, but loan size fell an average of $1,197. These stats indicate that consumers are exercising greater caution in their borrowing habits
More than 50% of loan applicants denied credit
53% of Americans Turned Down Due to Bad Credit More than half of U.S. consumers have been rejected for a loan or credit card based on an insufficient credit score. This is attributed to credit ignorance and too many credit cards. Credit ignorance includes applying for multiple cards when each application damages your credit.Mst people already have too many credit cards and should be focusing on paying them down to improve their credit scores and prequalified offers. The critical debt-to-income ratio is a primary reason for credit rejections, and consumers need to determine their ratios and pay down accounts that are unbalanced.