Ladies, get ready for (financial) bragging rights. A new study suggests that women, in many respects, are better at controlling and managing debt than men.
Experian, one of the largest credit bureaus in the country, analyzed its database of hundreds of thousands of consumer’s credit reports to determine the differences between men and women when it came to the amount of debt each group had. Turns out, the picture is a little less financially rosy for men than it is for women.
“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 for Experian, in a statement. “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.” Specifically:
- Men have 4.3 percent more debt than women.
Women have an average debt load of $25,095, while men have $26,227. Plus, the average credit score for women is one point higher than it is for men (675 vs. 674).
- Men have mortgage loan amounts that are nearly 5 percent larger than for women’s. While nearly three in four mortgages are held jointly, there are an increasing number of mortgages just in a man’s name (men take out roughly 18 percent more independent mortgages than women) or a woman’s name. Men have an average mortgage loan of $187,245, while women have one of $178,140.
- Men pay their mortgages late 7 percent more often than women do.
While this study, of course, doesn’t prove that women are better with money than men, it does show that both genders need to work on boosting their credit scores. To get the best rates on credit cards and loans, most lenders want to see a score of 750 or higher; the average credit score for men and women is in the high 600s.
The first step in improving your credit score is to find out what it is. Rod Griffin, the director of public education for Experian, recommends going on AnnualCreditReport.com to get a copy of the report (you get one free report per year). Once you know your score — and clear up any errors that might be on your credit report (you can find out how to report errors on the credit bureau’s websites), try to improve it.
Going forward, pay your bills on time. “This is the number one thing that impacts your credit score,” Griffin explains. Set up automatic email reminders using a Google calendar or through a site like Mint.com if you frequently forget to pay on time. It’s also important not to max out credit cards or take on too much debt; 30 percent of your credit score is determined by your “credit utilization,” or the amount of a person’s available credit that they have used. Finally, don’t apply for a bunch of credit cards or loans all at once, as this can make your score take a hit. Read more about credit scores here.
* All images are courtesy of Getty Images.