When It Comes To Debt, Women Are Smarter

Posted by Orb Staff on May 23, 2013 No Comments
Categories : Residential Mortgage

New research from Experian shows that when it comes to managing money and debt, women are superior to men.

According to the firm's latest credit trend study, men carry 4.3% more debt than women and have 2% higher credit utilization.

In terms of mortgage debt, men carry 4.9% more than women and have a 7% higher incidence of late payments.

Experian came to its conclusions after analyzing credit scores, average debt, utilization ratios, mortgage amounts and delinquencies of men and women in the U.S. No sample size was given.

The report finds that although women earn 23% less than men, they are more prudent in how they manage their money.

One interesting takeaway is that although 72% of consumers have joint mortgages, men are much more likely to take out an individual mortgage by comparison to women. On a national average, men have 18.3% more independent mortgages than women, according to the report.

However, stats for specific markets can paint a contrasting picture: For example, in Washington, D.C., women take out 33% more loans than men, according to Experian's research.

The research shows that the differences between men and women's financial habits can vary significantly from region to region and state to state: In Connecticut, for example, men with individual mortgages have an average of $229,510 in debt, while women have $175,276 in debt – a gap of 24%. What's more, men in Connecticut have late payments 13.6% more often than women, carry an average debt that is 8.6% higher and have a 5.6% higher rate of utilization.

Michele Raneri, vice president of analytics for Experian, said the data shows that women ‘are taking steps to manage their finances better than men.’

‘The most notable difference is that men are taking bigger individual mortgage loans than women,’ Raneri said in a release. ‘But it would appear that they are having a slightly more difficult time making those payments on time.’

In related news, mortgage default rates decreased during the month of April, according to data released by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices.

According to the data, the composite mortgage default rate fell to 1.42% in April – down from 1.5% in March and down significantly from 1.86% in April 2012.

The first mortgage default rate fell to 1.31% – down from 1.41% in March and down significantly from 1.76% in April 2012.

‘Consumer financial condition continues to improve,’ said David M. Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices. ‘Continued improvements in the economy and declining consumer debt are resulting in lower consumer default rates for mortgages and automobiles.’

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