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Millennial Snapshot: Comparing Homeowner vs. Renter Credit Scores

Millennials, those between the ages of 24 and 39, now make up the largest share of homebuyers in the United States. Many millennials have been successful in acquiring home loans because of their strong credit scores. 

LendingTree recently released data [1] comparing the credit files of millennials who have purchased a home versus those who haven’t. This data comes from the credit records of MyLendingTree users through the third quarter of this year. 

One of the key findings of the data is that millennial homeowners have higher credit scores overall than their renter counterparts. Millennials who have purchased a home have a median credit score of 693, compared to a median credit score of 601 for renters. This makes sense considering that those with higher credit scores are better able to qualify for loans and purchase homes.

The data also shows that millennial homeowners have a greater variety in their credit than renters do. Millennial homeowners have a median of 9 accounts of varying types, while renters have a median number of 6 varying accounts.

Millennial homeowners are also far more likely to have a credit card balance than their renting peers. Among homeowners, 91% have a credit card balance compared to 65% of renters. Homeowners also have more credit card debt, with an average of $9,255 in credit card balances, while renters owe an average of $4,843 in credit card debt.

Renters have slightly higher credit usage (30%) in comparison to the median utilization rate of homeowners (23%). The data also shows that renters search for new credit more often, with an average of 2 inquiries over the past six months while homeowners had 1.6 inquiries.

Renters tend to have more difficulty with making payments toward their overall debt, with an average of 10 late payments on their credit profiles while homeowners have an average of 6 late payments. 53% of millennial renters have at least one late payment in comparison to 44% of homeowners.

Despite some millennials struggling to keep their credit scores up, some may still qualify for home loans. It is too soon to know the long-term impacts that the pandemic and economic turmoil it has caused will impact the credit scores of millennials and Americans across all generations.