Most people are probably aware of the income gap between men and women, a phenomenon that has generated widespread debate and research. But is there a gap between men and women when it comes to loans and credit scores? This is a difficult topic to pin down, thanks to changes to regulations under the Equal Credit Opportunity Act (ECOA) of 1974, which prohibits lenders from discriminating against groups based on demographics, including race, color, national origin, religion, Gender, age, and receipt of public assistance.
While this information may not be readily available, we were able to make some assumptions about credit scores and gender usage from a 2020 report released by Experian, one of the three major credit reporting agencies. The company published a major analysis on the issue, Women and Credit in 2020: How History Shaped Today’s Credit Landscape, which breaks down the gender gap at the start of the third decade of the 21st century. This remains the most up-to-date and detailed source on this topic in 2024. Let’s look at the numbers for men and women and some historical context.
Key takeaways
- As late as the early 1970s, women faced many barriers to obtaining credit, requiring a male co-signer and a large down payment to obtain a loan.
- The Equal Credit Opportunity Act of 1974 prohibits practices that limit women’s ability to obtain credit and become financially independent.
- The average credit scores were the same for both sexes in 2020.
- Men and women have roughly the same levels of credit card debt.
- Overall, men have more debt than women, including all categories of debt except student loans.
Equal Credit Opportunity Act of 1974
It’s hard to believe that as recently as the 1970s, women were not allowed to take out loans or apply for credit without a male co-guarantor. Additionally, when purchasing a property, they typically must make a higher down payment than male applicants with similar credit histories.
Even today, according to the National Association of Realtors’ 2023 Buyer and Seller Profile, “women are still discriminated against when getting mortgages because they earn less than men,” part of the ongoing gender wage gap in the United States product. In 2023, on average, men earned 83.7 cents for every dollar earned by women.
Nonetheless, ECOA remains an important milestone in efforts to eliminate gender discrimination related to access to credit. Experian’s report shows that as of 2020, credit availability and use were largely identical for women and men. The table below outlines the difference in scores and average debt balances by type for men and women.
| Average debt and credit metrics by gender | |||
|---|---|---|---|
| Debt/Credit Indicators | male | female | female differences |
| average credit score | 705 | 704 | – 1 |
| total debt balance | $337,957 | $310,004 | – USD 27,953 |
| mortgage debt | $211,034 | $192,368 | – USD 18,666 |
| HELOC Debt | $47,017 | $42,746 | – USD 4,271 |
| car loan debt | $20,645 | $17,747 | – USD 2,898 |
| student loan debt | $35,188 | $36,131 | +$943 |
| personal loan debt | $17,716 | $14,780 | – USD 2,936 |
| credit card debt | $6,357 | $6,232 | – USD 125 |
| Number of credit cards | 3.6 | 4.5 | + 0.9 |
Source: Women and Credit 2020: How History Shaped Today’s Credit Landscape
This is not to say that men and women do not differ in their use of debt and credit. Men have more debt overall than women, including most debt categories. Women, on the other hand, have more student loan debt and typically have more credit cards.
704 and 715
Average credit scores for women as of Q4 2019 and average credit scores for U.S. consumers in 2023
Women’s vs. Men’s Credit and Debt
That there is any equality in the average credit scores of men and women is nothing new. The two numbers were similar in the mid-2010s, and both averages increased by 10 percentage points from the second quarter of 2015 to the fourth quarter of 2019. However, in today’s credit scoring models, due to ECOA, gender is not taken into account.
The Experian report notes that there are some differences in how men and women accumulate debt. Overall, men’s debt is about 9 percent higher on average than women’s: total debt balances are about $338,000, compared with $310,000 for women. This difference stems from men having more debt than women in all debt categories except one. Men have 9.7% more mortgage and home equity line of credit (HELOC) debt than women, 16.3% more car loan debt than women, and most notably, 20% more personal loan debt.
On average, women have slightly more student loan debt (2.7%) than men, and they also tend to have more credit cards, with an average of 4.5 credit cards compared to 3.6 for men. In terms of credit card balances, the difference between men and women is only $125 (about 2%), which is not statistically significant.
Are the average credit scores different for men and women?
not much differences. As of 2020, the average credit score for women is 704, while the average credit score for men is 705.
What is the Equal Credit Opportunity Act (ECOA)?
In 1974, the Economic Equality Act was passed by Congress and signed into law by President Gerald Ford. The bill strives to level the playing field for women’s access to credit. Before then, women could not take out loans or apply for credit without a joint guarantee from a man. Women typically have to pay a higher down payment than men when buying a home.
How big is the gender pay gap?
Women still earn less than men for the same job, which is known as the gender wage gap. In 2023, men earned 83.7 cents for every dollar earned by women.
Bottom line
Legislative changes in 1974 gave American women greater access to credit, allowing them to obtain loans and credit cards without having to rely on male co-signers or being unfairly penalized when applying for home loans. As of 2020, women’s credit and debt equity have increased significantly, with the average credit score being the same as men’s.
The makeup of debt does differ by gender, with men taking on more debt for homes, cars and other items, while women take on slightly more student loan debt overall. Although men’s average total debt balance is about 10% higher than women’s, the same average credit score means that different generations handle credit in similar and responsible ways.
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