Several factors on your credit report can determine your qualification for a loan. Here are some facts about most peoples credit, and how you can avoid common credit mistakes:
- On average, today’s consumer has a total of 11 credit obligations on record at a
credit bureau. These include credit cards (such as department store charge cards,
gas cards, or bank cards) and installment loans (auto loans, mortgage loans, student
loans, etc.). Not included are savings and checking accounts (typically not reported
to a credit bureau). Of these 11 credit obligations, 7 are likely to be credit cards
and 4 are likely to be installment loans.
- On average, today’s consumers are paying their bills on time. Fewer than 4 out of
10 have ever been reported as 30 or more days late on a payment. Only 2 out of 10
have ever been 60 or more days overdue on any credit obligation. 85% of all consumers
have never had a loan or account that was 90+ days overdue, and less than 10% have
ever had a loan or account closed by the lender due to default.
- About 48% of credit card holders carry a balance of less than $1,000. About 10%
are far less conservative in their use of credit cards and have total card balances
in excess of $10,000. When we look at the total of all credit obligations combined
(except mortgage loans), 54% of consumers carry less than $5,000 of debt. This includes
all credit cards, lines of credit, and loans-everything but mortgages. Nearly 30%
carry more than $10,000 of non-mortgage-related debt as reported to the credit bureaus.
- The typical consumer has access to $12,190 on all credit cards combined. More than
half of all people with credit cards are using less than 30% of their total credit
card limit. Just over 1 in 8 are using 80% or more of their credit card limit.
- The average consumer’s oldest obligation is 13 years old, indicating that he or
she has been managing credit for some time. In fact, we found that 1 out of 5 consumers
who recently applied for credit, had credit histories of 20 years or longer. Only
1 in 20 consumers had credit histories shorter than 2 years.
- When someone applies for a loan or a new credit card account – in short, any time one applies for credit and a lender requests a copy of the credit report – this request is noted as an inquiry in the applicant’s credit file. The average consumer has had only one inquiry on his or her accounts within the past year. Fewer than 7% had four or more inquiries resulting from a search for new credit.