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U.S. Credit Score Statistics Report 2019

The Authorized User Effect: New Study Reveals Its Unbelievable Credit Score Impact


In April 2019, Credit Knocks conducted a nationwide survey of U.S. adults aged 20-29 to learn about their credit education, their awareness  and use of "lesser-known" credit-building strategies such as the authorized user strategy, and how these correlated with their credit score.  

Study Goals


The scope of the Credit Knocks survey widely aims to segment the credit scores of authorized users on credit cards against non-authorized users on credit cards among 20-29 year olds.  We also segmented authorized users against adults of various income levels, ethnicities and education levels. The resulting report delivers insights into the incredible impact being an authorized user on a credit card has on credit scores. In most of our findings, being added as an authorized user had a more significant impact on credit scores than income, ethnicity, or education.

Report Key Findings

  • 1 in 5 Americans aged 20-29 didn’t know their credit score.
  • 38.1% had a 639 or lower credit score.
  • 1 in 16 have no idea what credit is.
  • 1 in 3 admits to having a very poor understanding of credit and scores.
  • 35.5% of Americans who taught themselves about credit had a 680 or higher credit score, compared with 30.5% who learned from friends/family, or college-taught 24.4%.
  • Only 13% of authorized users had a credit score under 600, compared to 24.6% who had not been added
  • 46.4% had a 680 or higher credit score, compared to 27.7% who weren’t added
  • 27.5% had a 639 or lower credit score, compared to 39.9% who weren’t added
  • Only 10.1% didn’t know their credit score, compared to 21.8% who weren’t added
  • 78.6% said they had a solid understanding of what affected their credit score, compared to 68.1% who had not been added
  • 45.61% of 20-29-year-old Americans have been declined credit in the past 2 years.
  • 27.7% got denied a credit card in the past 2 years.
  • 14.2% got denied a cell phone purchase in the past 2 years.
  • 13.3% got denied a car loan in the past 2 years.
  • 10.7% got denied a property rental application in the past 2 years.
  • 51.2% of Americans renting property had no idea they can report rent and utility bill payments to improve their credit scores

Authorized User Credit Statistics


How Does Being Added As An Authorized User Affect Credit Score?

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The "Authorized User Effect" explained in 30 seconds:

You can ask a family member, friend, or use a service to add you as an "authorized user" on their credit card. By doing so, the card holder's credit limit and long-standing payment history is adopted into your credit file. Your credit history does not impact the card holder's score in any way, and with this life hack, you don’t have to ever use or touch the credit card. In a matter of weeks, most new authorized users will see a substantial, positive increase in their own credit score.


When analyzing respondents' data further, Credit Knocks found a direct correlation with people who had been added as authorized users and good credit scores. In addition, there appears to be a direct correlation between credit awareness of those individuals who were added as an authorized user and those that had not been added.  

Of the respondents that had been added as an authorized user:

  • Only 13% of authorized users had a credit score under 600, compared to 24.6% who had not been added
  • 46.4% had a 680 or higher credit score, compared to 27.7% weren’t added
  • 27.5% had a 639 or lower credit score, compared to 39.9% weren’t added
  • Only 10.1% didn’t know their credit score, compared with 21.8% weren’t added
  • 78.6% said they had a solid understanding of what affected their credit score, compared to 68.1% who had not been added
American credit scores by authorized user statistics (USA)

Out of our respondents aged 20-29, the data below illustrates how ethnicity plays a role as an indicator of young Americans' credit scores:

American credit score by ethnicity / race statistics (USA)

It has already been widely studied and reported that Black and Hispanic Americans' credit scores are disproportionately lower, on average, than White and Asian Americans' scores.

However:

The remarkable statistics that the survey uncovered was how this scoring data looked when segmented by respondents that had been added as an authorized user on someone else’s credit card.

As you can see above, White and Asian respondents had a higher credit rating overall. However, 52.4% of non-white or Asian individuals that have been added as an authorized user on a credit card had a credit rating of 680 or more. Comparing this to white and Asians who had not used the authorized user effect, only 30.5% of them had a credit score of 680 or above.

See below how being added on someone’s card with a good credit rating can tip the pre-defined race averages vastly in the other direction.

Authorized user effect compared to race statistics (USA)

Out of our respondents aged 20-29, the data below illustrates how education plays a role as an indicator of young Americans' credit scores:

American credit score by education statistics (USA)

As you can see from the data above, education proved to be a leading indicator of someone’s credit score in our study.  From analyzing the data, 38.6% of all individuals who had a vocational, university, or post-graduate education had a credit score of 680 or higher.  However, this number dropped to 33.4% when the respondent had never heard of the authorized user strategy.

Where being added as an authorized user on someone’s credit card made the most significant impact was with individuals whose highest attained education was high school.  Only 19.3% of them had a credit score of 680+. However, as you can see below, these figures shifted dramatically to 36.0% for individuals that got added on someone’s card.

Authorized user effect compared to education statistics (USA)

Out of our respondents aged 20-29, the data below illustrates how income plays a role as an indicator of young Americans' credit scores:

American income level by credit score statistics (USA)

It’s commonly known that, where income is not directly used as a component of your credit score calculation, it is a leading indicator as you can see from the data above. Typically, income is only used by lenders as a ratio to work out if you can afford to pay back the debt.

Again, the authorized user effect was shown to trump income level effects in our study as well.  Overall, for individuals who earned $49,999 or less, only 24.6% of them had a credit score of 680+.  When we compare this to people from the same income-level group who got added as an authorized user, 52.6% of them had a credit score of 680+.

Authorized user effect compared to income statistics (USA)

Credit Knocks also surveyed our respondents regarding their knowledge of the authorized user effect and whether they had implemented it. Over a third wanted to use it but either didn’t know anyone to ask or were turned away by friends or family – all of which were unaware of services they could have used to be added to a card or tradeline, showing a large void in consumer awareness.

  • 48.4% of Americans had never heard of the authorized user effect
  • 12.1% got successfully added on a friend or family member’s credit card
  • 9.5% tried but couldn’t get anyone to add them to a card
  • 30.0% didn’t have anyone to ask
American added as an authorized user statistics (USA)

Note: The 39.5% that got turned down or had no one to ask were unaware some services could help if their friends or family have bad credit history too.


American authorized user paid service awareness statistics (USA)

When asking individuals if there were aware that they could pay to be added to a card as an authorized user, 82.46% of respondents had never heard of it. We have seen the authorized user effect providing sensational boosts to credit scores in every demographic in this study. By raising the awareness and educating America’s youth about its incredible impact and availability to all through paid services, they can start unlocking the doors to better credit.

U.S. Credit Score Statistics 2019


American Credit Score Demographics (20-29 Years Old)

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In the U.S. the well-known credit score system is FICO, which ranges between 300 (being very poor) and 850 (being exceptional). Most scores in the U.S. would typically fall between 600 and 750 as an average - the higher the score, the more likely lenders will accept credit decisions as they know you’re more likely to repay your debt. This score is typically made up of credit utilization, credit mix, credit inquiries, payment history, and age of credit data.

Out of our respondents aged 20-29, here is the current credit score distribution:

  • 38.1% of 20-29-year-old Americans had a 639 or lower credit score.
  • 29.8%  had a 680 or higher credit score.
  • 20.4% didn’t know their credit score.
American credit score statistics (USA)

In addition to the standard components that build up your credit score, lenders will also want to learn your income, which is not a direct component in credit scoring. Lenders will, however, use your income as validation in terms of denying applications based on a debt-to-income ratio. Below, we looked at how credit scores of Americans aged 20-29 correlated to their annual income.

Out of our respondents aged 20-29, this was the income-to-credit-score correlation:

  • 42.5% of America’s youth earning $49,999 or less per annum had a 639 or lower credit score, with only 24.6% reaching a score of over 680.
  • 26.0% of America’s youth earning $50,000-$99,999 per annum had a 639 or lower credit score, with a significant jump of 42.3% reaching a score of over 680.
  • 19.4% of America’s youth earning $100,000 or more per annum had a 639 or lower credit score, with a massive 48.4% reaching a score of over 680.
American income level statistics (USA)

U.S. Credit Education Statistics 2019


American Credit System Knowledge (20-29 Years Old)

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Credit Knocks asked respondents to rate their current knowledge of credit and the scoring system behind it. The report surprisingly uncovered that most young adults in American thought they had a solid understanding of credit. In fact, almost half of these respondents had low scores or no idea of their score – furthermore, they were unaware of the authorized user effect and their ability to utilize bills they’re currently paying to boost their scores.

Out of our respondents aged 20-29, people with a self-proclaimed ‘strong’ credit knowledge polled:

  • 39.5% had a credit score of 639 or lower, while 10.66% didn’t know their credit score (potentially almost half suffering from bad credit).
  • 77.52% of respondents with a solid knowledge of credit had never heard of authorized user effect services.
  • 41.2% of respondents with a solid understanding of credit had no idea they can use bills like utilities and rent to improve their score.
American credit knowledge statistics (USA)

Credit Knocks asked respondents how they had acquired their current knowledge of credit. The report surprisingly uncovered that self-taught Americans had the highest credit scores, on average, compared to those who had received their credit education by other sources.

Out of our respondents aged 20-29, this was the credit score data by credit education source:

  • 14.8% of Americans with zero credit education had a 680 or higher credit score.
  • 24.4% of Americans with high school or college credit education had a 680 or higher credit score.
  • 30.5% of Americans learning from friends and family had a 680 or higher credit score.
  • 35.5% of self-taught Americans had a 680 or higher credit score.
Credit survey - credit education

U.S. Credit Application Statistics 2019


Utilizing Existing Credit Lines to Boost Your Score

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It can be disappointing and frustrating at times to have credit denied by a lender. For almost half of our young adult respondents, this was a common occurrence.  In fact, nearly half had been denied some form of credit application in the past 2 years. As we can see from the credit education data previously, many also have a poor understanding of credit.

Out of our respondents aged 20-29, below is the percentage of credit declines in the past 2 years:

  • 45.6% of 20-29-year-old Americans have been declined credit in the past 2 years
  • 27.7% got denied a credit card in the past 2 years.
  • 14.2% got denied a cell phone purchase in the past 2 years.
  • 13.3% got denied a car loan in the past 2 years.
  • 10.7% got denied a property rental application in the past 2 years.
American credit application decline statistics (USA)

With almost half of our respondents failing credit applications in the past 2 years and similar numbers having a poor understanding of credit, Credit Knocks wanted to highlight a door that could get opened for a considerable proportion of these young adults.

Below we can see that the majority of our young respondents had many active bills that were being paid on a regular basis. These people are, in most cases, navigating life with low credit scores that could receive an almost instant boost from reporting this data to credit bureaus using a variety of services.

American popular utility bill statistics (USA)

Many of the services our respondents selected above are forms of rent or utility bills they pay regularly.  Unfortunately, their bill payments (even if timely &consistent) have NO impact on their credit score because these bills are not generally reported to the bureaus.  However, they can easily be reported to credit bureaus via services.  Reporting of this additional data (known as "alternative data" in the credit space) could help the bureaus to get a better understanding of their reliability as a potential borrower.  Half of our respondents that rented and 1 in 3 with a low credit score had no idea they can use this data to boost their credit score.

  • 51.2% of Americans renting property had no idea they can report rent and utility bill payments to improve their credit scores
  • 35.8% of people that had a credit score of 639 or lower didn’t know they can improve it with rent and utility bill reporting services
  • 1 in 4 people that didn’t know about utility reporting services also didn’t know their credit scores
Utility bill reporting statistics (USA)

Report Methodology and Downloads

Data Source And Methods

  • This nationwide survey was conducted via Pollfish on 2019-04-30
  • All respondents were United States residents
  • We had 42.98% male and 57.02% female respondents aged 20-29

Copyright Information

All the data included in this study is available via public domain. This means all statistics may be copied without permission, we do however appreciate citation as the source via a link.