The Maddening Reason Women Have Lower Credit Scores Than Men

Photo: Mint Images/REX Shutterstock.
As if there weren't already enough reason to be annoyed by the wage gap, there's another consequence you may not have realized. Women have lower average credit scores (621) than men (630), according to analysis by CreditSesame.com.

The credit analytics site explains how the lower average income of women leads to their lower scores, even though income isn't a direct factor in the calculation. Higher incomes mean higher credit limits, so men have an average credit card limit of $20,043, while the average for women is $17,159. The average debt on those cards is higher for men — $3,854 vs. $3,624 for women — but that still works out to men using 19% of their limit versus women using 21%.

"Credit utilization plays an important role in credit scoring formulas," the site states. Having a higher amount of debt also improves your credit score (one of those contradictions that can make responsible borrowers fume), so men are getting two benefits in this category. Women, meanwhile, get their scores docked further by being more likely to have accounts that have been handed over to collection agencies — just another consequence of making an average of 78 cents on the dollar.
And in case you need a recap, lower scores mean that if and when you qualify for loans, mortgages, and the like, your interest rates might be higher, compounding the impact of all of the above.

Let that be inspiration next time you need to negotiate your salary, ladies.
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