Millennial Credit Scores ‘All over the Map’

Ellie Mae, Pleasanton, Calif., said average Millennial borrower credit scores on closed loans varied greatly from city-to-city in May, ranging from the mid-660s to the mid-750s.

The company’s monthly Millennial Tracker reported average credit scores for borrowers in the top housing markets for Millennials (based on percentage of Millennial loans closed) significantly differed across the country, with averages ranging from 662 in Madisonville, Ky. to 757 in San Francisco.

The report noted while coastal areas saw higher average FICO scores, such as Los Angeles (745), Boston (701) and Miami (722), it also saw “surprisingly high” numbers in some rural areas, such as Mitchell, S.D. (735).

“You would expect to see higher average FICO scores in the largest coastal metropolitan cities where loan amounts are higher,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “Many Millennials have a strong misperception about needing a perfect credit score to qualify for a home loan.”

Overall, Ellie Mae reported the average FICO score for all closed loans to Millennials in May held steady for the third month in a row at 721, the lowest average for Millennial borrowers since April 2017. Comparatively, Ellie Mae’s latest Origination Insight Report showed that the average FICO score for borrowers of all ages who closed loans in May was 724, one point up from 723 in April.

Additional report findings:

–Purchases made up 90 percent of all closed loans to Millennials, up from 89 percent in April; refinances represented 9 percent, down from 10 percent the month prior, with one percent remaining unspecified month-over-month.

–Conventional loans remained the most popular loan product for Millennial borrowers at 68 percent of total closed loans in May. FHA loans accounted for 28 percent of closed loans. During this period, VA loans represented just 2 percent of all closed loans. The remaining 3 percent were undisclosed.

–Millennial males were listed as the primary borrower on 62 percent of closed loans, while females were listed on 32 percent and 7 percent were unspecified. For comparison, in May 2017, males were listed as the primary borrower on 65 percent of loans, females at 32 percent and 3 percent were unspecified.

–The average age of Millennial borrowers held steady from the month prior at 29.9.