Americans’ average credit score has dropped a full 10 points since January, from an average of 676 down to 666 in September. Aside from it being quite an ominous sign as we approach Halloween, an average credit score of 666 also means that the average consumer is teetering between fair and good credit. That spells more limited financial opportunities, not-so-favorable offers, interest rates on the higher end, and the possibility of being denied a loan, credit card, and mortgage.
In an effort to remind you to boost your credit score before it becomes a nightmare, here’s some daunting Credit Karma data to scare you straight to better credit health.
1. $2,000 More In Student Loans
If you went to college, chances are the hefty bill you were stuck with is close to the current average $28,425 student loan debt figure. That’s a $2,000 hike since just last September’s average of $26,295. Talk about the price of higher education!
2. Your Auto Loan Won't Depreciate
Roughly 42% of consumers have an auto loan (up from 39% last year), and tote an average $15,122 auto loan debt for their set of wheels. While a car’s value depreciates rapidly with wear and tear, your car loan’s value stays the same. You’ll still be paying the same payment and added interest in your car even when it’s only worth a fraction of what you are paying.
3. Minimum Payments Lead To 17 Years In Debt
If you are saddled with the average credit card debt of $7,526 and only make minimum payments from here on out, here’s a glimpse into your dark and foreboding future: Paying only a 3% minimum monthly payment on a card with a 16% interest rate, it would take roughly 17 years and an additional $5,800 in interest to finally pay off that debt.
4. Average Total American Debt: $276,752
If we took all the averages of debt in the categories of credit card ($7,526), mortgage ($174,456), home equity ($51,223), auto debt ($15,122), and student debt ($28,425), it adds up to an average $276, 752 in debt for the average Joe and Jane. This isn’t just a horror story—this is reality for many Americans.
These debt statistics aren’t meant to depress you. But they call attention to the frightening fact that despite reports of Americans squirreling away more savings and re-learning the meaning of frugality, on average, we are diving into deeper debt and losing points on our credit scores.
Stay sharp this fall on your credit health. Catch up on LearnVest advice, follow Credit Karma's blog, and do whatever it takes to truly commit to bettering your finances. That way, you can skip the scary 666 credit score statistic and ring in the New Year in healthy financial shape.
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