Women surpass men in using credit wisely

Several studies have revealed that when it comes to investing in retirement and financial preparedness, men typically surpass women, as the latter tends to be more cautious. However, this slow and steady approach may pay off for women in regards to their credit standing and debt balances, new findings reveal.

Data from credit bureau Experian shows that women are typically more responsible than men when it comes to managing their money wisely, avoiding excessive credit card debt and taking steps to improve their credit scores and reports. The study shows that men carry 4.3 percent more debt than women, and have a 2 percent higher credit utilization amount. Perhaps as a result, men also carry more expensive mortgages, which are on average 4.9 percent larger than home loans extended to females. To add to the burden, males also have a higher incidence of late payments.

“When looking closer at our data and cross-referencing it with other data sources, we see that women working full-time in the United States earn approximately 23 percent less income than men but that women are taking steps to manage their finances better than men,”said Michele Raneri, vice president of analytics at Experian. “The most notable difference is that men are taking bigger individual mortgage loans than women, but it would appear that they are having a slightly more difficult time making those payments on time.”

Smart credit lessons for both genders

Good credit is crucial to keeping costs low and having access to financial opportunities, regardless of gender. Individual credit scores are imperative to obtaining favorable lending terms, securing a job and being assigned competitive insurance rates. When couples tie the knot and apply for a joint mortgage or auto loan, strong scores held by both applicants can help them get a more affordable loan.

Given the importance of credit in several categories, all individuals should implement smart credit tips to begin improving their standing. For example, males and females should make each and every bill payment on time, as payment history makes up the largest percentage of their credit scores.

Overdue balances can drag a score down quickly, and the better the credit score is, the more adversely it will be impacted by late payments. Keeping credit balances low is another important feature to strengthening a credit rating. Utilization rates – which is the ratio of revolving balances to available credit lines – makes up the second largest percentage of an individual’;s score, and maxing out cards or running up high balances can cause this ratio to spike.

It’s also important to avoid closing long-standing accounts or submitting excessive applications for credit, as both of these actions can chip away at a good credit rating.

 

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April Lewis-Parks
Director of Education and Public Relations

AParks@consolidatedcredit.org
1-800-728-3632 x 9344