IE 11 is not supported. For an optimal experience visit our site on another browser.

Being a woman hurts your credit score — Here's what you can do about it

Women spend less and owe less, but often have lower credit scores than men.
Image: Credit
Woman in cafe shopping online with laptop.filadendron / Getty Images

When it comes to credit scores, there’s a gender gap — and it’s probably not in your favor.

Men have an average credit score of 630 out of a possible 850, while women lag behind at 621. True, credit scores for both sexes tend to improve with age, but women never draw even, let alone pull ahead.

Why? A lot of it boils down to the gender pay gap. This year, the median salary for women is roughly 22 percent lower than the median salary for men. This has improved only slightly from 2016 when the median salary for women was roughly 24 percent lower than men’s.

Because women make less than men, they tend to use a bigger portion of their total available credit.

“That hurts their creditworthiness,” Steve Millstein, a certified credit counselor at CreditRepairExpert told Know Your Value. Credit bureaus do not prefer one gender over another. They simply care about creditworthiness, which is influenced by income, outstanding debt and the history of repaying loans or making timely payments for goods and services, he said.

“They simply use numbers and facts to draw their inferences,” Millstein said.

But we owe less!

According to Credit Sesame, an online credit and loan management platform, men carry an average of $25,225 in debt compared to $21,171 for women. Women also more likely to ask for help when they’re struggling with credit. But that’s still not enough to level the field. It’s all about credit utilization, or the amount of available credit you’re using, Randall Yates, founder and CEO of The Lenders Network, an online mortgage marketplace, told Know Your Value.

A good rule of thumb is to keep credit utilization under 30 percent, he said. Credit utilization is the amount of your credit card balance compared to the credit limit. To keep credit utilization under 30 percent on a card with a $1,000 limit, you should keep your balance under $300. That ratio would apply to all your cards and credit lines.

This is important, Yates said, because credit utilization plays a major role —30 percent— in your credit score. In fact, credit utilization is the second biggest factor that influences your credit score, second only to your payment history.

For example, if a man earns more, on average, than a woman and has higher card limits, he can spend more than his female counterpart without having such a negative effect on his credit score.

“My girlfriend has much less debt than I do, but since I have higher credit limits, I'm able to carry more debt without it hurting my credit score as much,” said Yates.

Why It Matters

Most lenders use Fair, Isaac (FICO) scores, which range from 300-850, to gauge creditworthiness. You actually have three FICO scores, one for each of the three credit bureaus (Experian, TransUnion, and Equifax). Each is based on information that credit bureau keeps about you. The higher your score, the better track record you have in paying debt. The average FICO score is 704.

Every point matters. Just a few up or down can have a “huge effect” on the loans you’re eligible for and interest rates. “A score of 720 or higher can make you eligible for lower interest rates and may be the difference between getting a loan or not,” Kimberly Palmer, a personal finance expert for NerdWallet, a personal finance website, told Know Your Value.

Your credit score also can impact other areas of your life. Landlords, employers and utility companies all run credit checks. “Your score can even affect which cell phone plan you’re offered and your auto insurance rate,” said Palmer.

What’s My Score?

It’s probably easier than you think to find out your score. Some credit card companies and banks already include your score on monthly statements or make it available online. You also can purchase your credit score from one of the credit bureaus or FICO.

If your score seems low, you can request a free annual copy of your credit report from each bureau at or by calling 1-877-322-8228. If you spot errors, you can submit a correction request to the bureau(s). Be sure to include copies of all the documentation you’ve kept on correspondence with the creditor.

Can I Raise My Credit Score?

There are no quick fixes to improving your credit score, but these four tips can help.

1. Use your credit.

“Using credit shows lenders that you know how to borrow and pay back loans,” said Palmer. In general, men use more credit and carry higher loans, which can lead to higher scores, as long as those loans are managed responsibly and paid on time each month. Conversely, if you are someone who avoids credit, it can hurt you because you won’t have a credit history. That means your score will be on the low side, she noted.

2. Pay on time.

Studies show women are also more likely than men to miss a payment, and that’s a red flag to lenders. It's important you make all of your monthly payments on time. A simple way to ensure this is by setting up automatic payments on your credit cards. You can set up your payments to come directly out of your checking account on the due date, advised Yates.

3. Don’t open too many cards at once.

When you apply for a new card or any new loan for that matter, it temporarily lowers your credit score because it signals to lenders that you are considering taking on more debt. “If you’re thinking of applying for a big loan, for a car or home, you’ll want your score to be as high as possible so you get the best interest rates,” said Palmer.

4. Keep old accounts active.

“Having credit cards that show a lengthy payment history will help your score,” said Palmer. You may want to put a recurring cost, like a utility bill, on those you’re not using regularly. What you don’t want to do is close them, or have them cancelled, especially if you plan to make a big purchase like a car or house, she said.