Credit Repair

Does Gender Affect Your Credit Score?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

The government tightly regulates the calculation of credit scores. Scoring agencies can ding you for things like late payments, a high amount of debt or a short credit history, but creditors are not allowed to discriminate against applicants on the basis of certain demographic factors, including gender.

However, that doesn’t mean men and women are on a level playing field when it comes to building and maintaining good credit. Here’s how gender might affect your credit score:

Federal Reserve research on “gender-related differences”

To understand how gender may influence credit scores, the Board of Governors of the Federal Reserve System analyzed more than 10 years of data from Mintel and TransUnion on more than 3,700 single men and almost 4,000 single women between the ages of 21 and 40. Geng Li, the economist who authored the report, found that, on average, women had lower credit scores than men. The mean VantageScore for women 21 to 30 years old was 762, whereas men in that age group earned a mean score of 768. The disparity widened in the 31-to-40 age group, with a mean of 785 for women, compared with 793 for men.

The women in the study actually fared better than men in some areas that may have positively affected their credit scores. They had, on average, a longer credit history and fewer credit inquiries than men. However, women tended to have more outstanding debt and higher credit utilization ratios and were more likely to have become delinquent than men in both age groups. These factors may hint at possible reasons why women had lower credit scores overall.

The author acknowledged that the report had some limitations. In order to find comparable men and women, Li excluded data on people who were married or living with others, as they may be more likely to make financial decisions collaboratively, thus making it difficult to identify “gender-specific credit market experiences and decisions.” The data was also limited in terms of the age of subjects, which maxed out at 40. Despite these limitations, the report shed light on key differences in credit use and scores between genders, and may reflect larger trends in the population.

Gender wage gap

Gender is not part of the criteria in credit scoring, yet women tend to have worse credit than men. Why?

“Although behavioral differences and attitudes about credit may be to blame, they are likely only part of the story,” said Kimberly R. Goodwin, Ph.D., associate professor of finance at the University of Southern Mississippi. “The bigger issue is probably related to the financial challenges that burden young women.”

The gender wage gap may account for some of the differences in credit scores. A report from the U.S. Census showed that women made about 80 cents for every dollar earned by a man. Furthermore, women tended to enter the workforce with more student debt than men.

“So, women start their adult lives with a greater debt burden and lower salary to service that debt burden,” Goodwin said. “These conditions set women up from the very beginning to have lower credit scores, higher borrowing costs and a higher probability of delinquency.”

Since men tend to have less debt and higher salaries, it may be easier for them to build a steady history of on-time payments, have a diverse credit mix and pay down debt sooner — all factors that can positively influence a credit score.

Interestingly, women haven’t let the pay gap and higher debt load prevent them from making financial decisions that could help their credit scores. Using data from the 2017 American Community Survey, LendingTree found that single women were more likely to own a home than single men. Assuming they make their mortgage payments on time, getting a home loan may improve their credit mix and subsequently boost their credit score.

How to improve your credit

Your credit score can influence your life in a variety of ways, from the interest rate you pay on personal loans and credit cards to your employment. Even though men and women may not have the same average scores, everyone can take steps to earn points. Here are some ways to improve your credit score, regardless of your gender:

  • Make on-time payments: Your payment history has a bigger influence on your score than any other factor. Paying your bills on time or early every month can bump up your credit score. Consider signing up for automatic bill payments if you tend to be forgetful.
  • Keep credit card debt low: Using too much of your available credit can hurt your score. Strive to pay off your entire credit card balance every month, and limit your use of available credit to no more than 30 percent.
  • Use multiple types of credit: Always rely on your debit card to make purchases? It might be time to open a credit card. Having a variety of types of credit, like a mortgage, personal loan and a credit card, can benefit your credit score.

Bottom line

The gender pay gap adds an extra challenge for women who want to build good credit. But by paying bills on time, keeping a low debt-to-available-credit ratio and maintaining a diverse credit mix, women can earn a credit score that’s just as high as the guys.


Looking for ways to increase your credit score? Get a free credit consultation today!

You can do something about your debt, right now.

  • Answer a few questions

  • We'll analyze your credit and debt

  • You'll receive instant, custom recommendations