Women Have Lower Credit Scores Than Men. Here’s How to Close the Gap


We talk about the gender wage gap, but what about the gender credit-score gap?

The median credit score for men is 22 points higher than for women, according to a Federal Reserve analysis.

In an ideal world, society would shift toward gender equality, like, yesterday, and make it possible to effortlessly close this gap.

Unfortunately, that’s not going to happen, so you’ve got to take control. Not to be cliche or anything, but knowledge is power, and understanding why women have lower credit scores — and exactly how to increase yours — is the first step to closing this gap.

But here’s at least a little bit of good news: Managing your credit score might not be as difficult as you’d expect. Free services make the process fairly straightforward. I’ve used Credit Sesame for my free credit score and personalized recommendations to better manage it.

Why Women Have Lower Credit Scores Than Men

The Federal Reserve analysis looked at more than 8,000 VantageScore 2.0 credit scores from single men and women (because singles tend to make more independent decisions and lean on one income).

For those aged 31 to 40, men’s credit scores averaged 828, while women’s averaged 806. (Note: On the VantageScore 2.0 scoring model, the scale runs from 501 to 990, unlike FICO and later VantageScore models, which run 300 to 850.)

No, women don’t have a lower credit score because they’re bad with money or like to go shopping when they’re sad. Puhlease give that a break.

Rather, the credit score gap can be attributed to, in part, the gender wage gap.

Looking at incomes within this same demographic, men make, on average, nearly $3,500 more per year than women, according to the 2017 Census Bureau American Community Survey. That means women have $3,500 less to cover the same expenses men face.

This could lead to more debt, higher credit-utilization rates or more bills in collections… which is exactly what seems to happen.

The Federal Reserve found that women’s median debt owed is $11,000 more than men’s. They also have higher credit-utilization rates and higher rates of late payments. Credit utilization and payment history together make up 65% of your credit score.

“The credit-score gaps reflect the fact that single women have more intensive use of credit and have experienced more difficulties repaying their debt in the past,” the Federal Reserve concludes.

Why Your Credit Score Matters — and How to Manage It

Looking to take out a loan, secure a mortgage, open a credit card, apply for insurance or even sign up for a new cell phone plan?

Your credit score can affect all those decisions.

You might be thinking 22 points won’t make that big a difference. But it can.

Just a few points’ difference in your credit score can drastically change the interest rates on your mortgage, which will result in you paying hundreds, if not thousands, of dollars more over time.

This can turn into an endless cycle, which is why it’s time we need to close the credit score gap — even if we do have to fight harder. (’Cause, ya know, change takes time. *eye roll*)

You can start by checking your credit score for free with Credit Sesame. It takes less than two minutes to sign up, and, once verified, you’ll immediately see your score for free.

To find out exactly what’s holding you back, you’ll want to tap into your credit report card — also free. Credit Sesame takes each factor that affects your score and gives you a grade.

For example, I currently have a “D” in the account-mix category because I only have two accounts open. I also have a “B” in credit usage, because my credit utilization rate is approaching the recommended 30% limit right now.

The best part is Credit Sesame offers actionable tips. For me, it’s to open another credit card; that’ll pump up my account mix and alleviate some of the debt on my single card. It even gives me an option where my approval odds are “very good.”

Doing this could increase my credit score 11 points — if not more.

Heck, that simple moves gets me halfway toward closing this darn gap.

So if you’re ready to close the gender credit-score gap, too, access your credit score and credit report card for free from Credit Sesame.

Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder. The Penny Hoarder data journalist Alex Mahadevan contributed reporting to this article.

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