Household Debt and Credit Report (2024)

FAQs

How much household debt is ok? ›

Each household should spend no more than 36% of their income on debt overall. This includes housing, car loans, credit cards, etc. For example, if you take home $4,000 a month, you should not be spending over $1,120 on housing expenses and $320 total on other debts each month.

The average debt in America is $104,215 across mortgages, auto loans, student loans, and credit cards. Debt peaks between ages 40 and 49 among consumers with excellent credit scores. The largest percentages of the average consumer debt balance are mortgages.

The report shows total household debt increased by $184 billion (1.1%) in the first quarter of 2024, to $17.69 trillion. The report is based on data from the New York Fed's nationally representative Consumer Credit Panel.

Household debt is defined as all liabilities of households (including non-profit institutions serving households) that require payments of interest or principal by households to the creditors at a fixed dates in the future.

Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment. The National Foundation for Credit Counseling recommends that the debt-to-income ratio of your mortgage payment be no more than 28%.

According to the 28/36 rule, you should spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts. Housing costs can include: Your monthly mortgage payment. Homeowners Insurance.

The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.

Debt-to-Income Ratio

It is expressed as a percentage. You should shoot for 35% or less (more on this shortly). Recurring monthly debt is bills you must pay every month, like mortgage or rent, car payment, credit cards, student loan and monthly debt bill.

How much mortgage debt does the average American have? The average mortgage debt among Americans is $244,498, per Experian's 2023 State of Credit Report. That's up from the average mortgage debt reported by Experian in 2022: $232,545.

U.S. Household Debt Is at an All-Time High

The total household debt of $17.3 trillion entering 2024 is a new high for the U.S. The largest increase in any category was credit card debt, which swelled by 16.6% between Q3 2022 and Q3 2023, the most recent term for which federal data was available.

What generation is currently in the most debt? ›

(NewsNation) — Mortgages make up the bulk of household debt but a new analysis shows most Americans owe thousands of dollars beyond their home loans, with members of Gen X carrying the highest balances.

Average American household debt statistics

Americans spend roughly 9.58 percent of their disposable income on debt repayment, according to the Federal Bank of St. Louis. American households in total hold $11.67 trillion in debt, according to the Federal Reserve Bank of New York.

Household debt relative to disposable income and GDP. Household debt can be defined in several ways, based on what types of debt are included. Common debt types include home mortgages, home equity loans, auto loans, student loans, and credit cards.

High-interest credit card debt can devastate even the most thought-out financial plan. U.S. consumers carry $6,501 in credit card debt on average, according to Experian data, but if your balance is much higher—say, $20,000 or beyond—you may feel hopeless.

Ideally, financial experts like to see a DTI of no more than 15 to 20 percent of your net income. For example, a family with a $250 car payment and $100 of monthly credit card payments, and $2,500 net income per month would have a DTI of 14 percent ($350/$2,500 = 0.14 or 14%).

35% or less: Looking Good - Relative to your income, your debt is at a manageable level. You most likely have money left over for saving or spending after you've paid your bills. Lenders generally view a lower DTI as favorable.