Credit Karma’s State of Debt and Credit Report

2020: Year in review

The effect of the coronavirus pandemic on people’s finances varied in 2020 — but data from our survey of millions of Credit Karma members shows that although debt increased overall, average VantageScore 3.0® credit scores remained in the “good” range during this challenging time. Read on for details and analysis, including data by generation and geography.

Debt


In 2020, total debt among Credit Karma members averaged $81,212. That’s a 6% increase from 2019, when average total debt was $76,736. This uptick in average total debt may be traced to increases in average auto loan, mortgage and student loan debt in 2020.

Generation Z saw their average total debt increase by 25% in 2020, more than six times the 4% increase of Baby Boomers. However, Baby Boomers carried more total debt in 2020, averaging $108,022 compared to the much smaller average total debt of Generation Z, which averaged $17,896.

Credit Karma members with thin credit files saw their average total debt increase by 27% in 2020 compared to 2019. For context, the group with the next-greatest debt increase was members with VantageScore 3.0 credit scores above 720 at 4%. Those with credit scores between 660 and 719, a range that includes both fair and good scores, saw their average total debt increase by only 2%. Although members with thin credit saw the largest percentage increase year over year, people with credit scores above 720 took on more debt in terms of raw numbers.

Changes in average total debt by score band, 2020 vs. 2019
Score band 2020 avg total debt 2019 avg total debt $ increase, 2020 vs. 2019 % increase, 2020 vs. 2019
Thin file $10,886 $8,585 $2,301 27%
<599 $53,321 $51,641 $1,680 3%
600–659 $80,840 $78,675 $1,805 3%
660–719 $95,223 $93,133 $2,090 2%
720–759 $111,983 $107,598 $4,385 4%
760+ $133,084 $127,729 $5,355 4%

The map below shows the percentage increase in members’ average total debt across states in the past year, with the highest increase in average debt represented by the darkest shade. Alaska and Utah saw the highest debt increases (both 9%). Connecticut saw the lowest increase in debt at only 3%.

Credit card debt

Average credit card debt among Credit Karma members was down nearly 2% year over year in 2020.

  2020 2019
Average credit card debt $5,694 $5,807

Based on Credit Karma members with credit card debt in 2020.

Credit Karma members in Midwestern cities tended to have lower credit card debt, while coastal cities — particularly in California — had some of the highest, our data showed.

Credit Karma’s Gen Z members had the lowest average credit card debt as of 2020. Baby boomers had the most, with Gen X not far behind.

Average credit card debt by generation in 2020
Generation Avg credit card debt
Gen Z $1,666
Millennial $4,811
Gen X $7,680
Baby boomer $8,313
Silent $7,484
Greatest $5,503

Based on Credit Karma members with credit card debt in 2020.

Auto loan debt

Average auto loan debt was up about 3% among Credit Karma members in 2020 compared to 2019, while average monthly auto payments rose 1.5%.

  2020 2019
Average auto loan debt $20,300 $19,697
Average monthly auto loan payment $420 $414

Based on Credit Karma members with auto debt in 2020.

Auto loan debt was highest for those with fair to good credit scores. Our analysis found that Credit Karma members with VantageScore 3.0 credit scores from 660 to 719 (which are considered to be within the fair-to-good-score range) carried the highest average auto loan debt at $22,836 in 2020.

Gen Xers had the highest average monthly auto payment. Gen X members were paying $451 per month on average for their auto loans in 2020. Gen Z had the lowest average monthly auto loan payment at $355 but saw the largest increase in their average monthly auto payments in 2020 (3.7%).

Mortgage debt

Average mortgage debt among Credit Karma members with mortgages was up 5.2% in 2020 compared to 2019, while average monthly mortgage payments fell approximately 2.6%.

  2020 2019
Average mortgage debt $197,685 $187,981
Average monthly mortgage payment $1,340 $1,375

Based on Credit Karma members with mortgage debt in 2020.

Credit Karma members in California had the highest average monthly mortgage payments in 2020. Six of the 10 cities with the highest average monthly mortgage payments in 2020 were in California. Meanwhile, the highest average total mortgage debt was in Hawaii, at $381,924.

Millennials had the highest average mortgage debt in 2020, at $214,309. Gen Z members had the lowest average mortgage debt at $165,586 — almost a 30% difference.

Student loan debt

Average total student loan debt among Credit Karma members was up about 5% in 2020 compared to 2019. But 2020 also saw a dramatic decline in average monthly student loan payments, down about 39% on average.

Instead of reflecting a durable decrease in payment amounts, this payment drop could be a result of federal COVID relief. In early 2020, the federal government set the interest rate for federally owned loans to 0% and suspended mandatory payments starting March 13. That payment pause has since been extended through September 30, 2021. However, private student loan lenders were not required to suspend the accrual of interest or the collection of payments. The data below reflects debt reported to TransUnion as student loan debt, and it may include data for both private and federal student loans.

  2020 2019
Average student loan debt $37,865 $36,089
Average monthly student loan payment $44 $72

Based on Credit Karma members with student loan debt in 2020.

Gen X had the most student loan debt in 2020. Our data shows that Gen X members had more than three times as much student loan debt on average as Gen Z members in 2020. But Gen Z members saw their average student loan debt increase by nearly 18%, three times the rate of increase that Gen Xers saw (about 6%).

Changes in student loan debt by generation, 2020 vs. 2019
Score band 2020 avg total debt 2019 avg total debt $ increase, 2020 vs. 2019 % increase, 2020 vs. 2019
Gen Z $14,899 $12,651 $2,248 7.8%
Millennial $36,734 $34,856 $1,878 5.4%
Gen X $48,886 $46,351 $2,535 5.5%
Baby boomer $47,650 $45,042 $2,607 5.8%
Silent $37,527 $35,379 $2,149 6.1%
Greatest $37,455 $34,340 $3,114 9.1%

Based on Credit Karma members with student loan debt in 2020.

Average monthly student loan payments were higher for Credit Karma members in the Northeast and lower in the South. The average monthly student loan payment was more than twice as much in New Hampshire (about $58) as it was in Mississippi (about $24).

Credit scores



The average VantageScore 3.0 credit score for Credit Karma members in 2020 was 669 — eight points higher than in 2019. VantageScore 3.0 considers credit scores ranging between 661 to 780 to be in the good range.

Some generations had better average credit scores. Members of the silent generation had average VantageScore 3.0 scores of 728, within the good range.

Members in Southern states had the lowest average VantageScore 3.0 credit scores. The 10 states with the lowest average VantageScore 3.0 credit scores in 2020 were all in the South. Mississippi had the lowest average VantageScore 3.0 score in 2020 at 626. At 670, New Hampshire had the highest average credit score.

Payments


On average, Credit Karma members across the U.S. had a record of making on-time payments 97% of the time in 2020, which is comparable to 2019.

The lowest on-time payment rates were among members in Louisiana and Mississippi. On average, they paid on time 95% of the time.

Overall, eight states made improvements to their average on-time account payments rate in 2020: Alabama, Nebraska, South Carolina, South Dakota, Texas, Vermont, Wisconsin and Wyoming.

Past-due accounts

The average number of past-due accounts — accounts with payments late by 30 days or more — for Credit Karma members was down slightly in 2020 compared with a year earlier. However, on average, Credit Karma member accounts had at least one past-due account.

  2020 2019
Average number of past-due accounts 1.08 1.66

Open collections

Amongst Credit Karma members that had an account in collections, the average number of accounts in collections recorded on Credit Karma member credit reports was slightly up in 2020 compared to 2019.

  2020 2019
Average open collections accounts 3.31 3.27

Based on Credit Karma members with open collections in 2020.

Some states had fewer accounts in collections on average compared with others. For example, Rhode Islanders with accounts in collections had an average of two accounts in collections while those in Maine had an average of six.

Average number of open collections accounts for Credit Karma members in 2020
Credit score band Average number of open collections
Thin file 1
300–599 4
600–659 3
660–719 2
720–759 2
760–850 2

Credit demand


The average number of hard credit inquiries across all Credit Karma members was steady in 2020 compared to 2019, at about five inquiries on average per member.

Millennial and Gen X Credit Karma members had the most credit inquiries on average, at six inquiries — while members of the silent and greatest generations had four inquiries on average.

The number of inquiries also varied by city. At the low end, Mesa, Ariz.–based Credit Karma members had an average of three inquiries on their credit reports in 2020. Members had an average of eight inquiries — the highest average number of inquiries — in Cleveland, Ohio; Fresno, Calif.; Plano, Texas; and Arlington, Texas.

Improving credit health


Make a budget

The first step to managing debt is to understand your overall financial picture. The best way to do that is by making a budget. First add up your income and then your expenses, including debts.

From there, you can get a sense of how much of your income goes to essentials versus debt repayment versus luxuries. Once you know where you are, you can make a plan for where you want to go. Check out some of our other tips on budgeting and managing your finances in 2021.

Understand the types of debt you owe

Before you make a plan to pay down debt, it’s helpful to know that not all types of debt are the same. In fact, some types of debt are usually considered better than others. For example, buying a home or taking on a student loan is typically seen as “good debt” because it might lead to longer-term financial gains for the borrower.

On the other hand, credit card debt generally doesn’t leave you with appreciating assets — so it’s considered a “bad debt.”

Once you know the difference between good and bad debt, you can better strategize which debt is worth taking on in the first place and then dealing with in the long term compared to debts you want to pay off ASAP or might not want to accrue in the first place.

Create a debt plan that makes sense for you

Once you’ve assessed your budget and the types of debt you have, it’s time to make a plan to tackle that debt! There are debt repayment strategies — like the snowball method or the avalanche method — that can help you pay down your debts in a certain order or priority level. Depending on the type of debt you have and your overall credit health, you could also potentially consider …

If you’re not sure where to start, it might be a good idea to seek credit counseling or to contact your lender to work with them on your repayment schedule. There may also be other debt relief options out there for you.

Remember it’s OK to ask for help

This is a challenging time for many. If your debt grew in 2020 because of COVID-19, you may be able to contact your lender or landlord to see what your options are. We’ve got a roundup of articles on COVID financial relief options that could help depending on the type of debt you have.

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