 TITLE: Credit Card Debt in 2020: Balances Drop for the First Time in Eight Years CONTENT: Credit Card Utilization at Lowest Level in Over a Decade\n--------------------------------------------------------\nDriven by shrinking balances, consumers' average credit utilization ratio dropped to 25%—the lowest it's been in at least 10 years. Since 2019, the average credit utilization ratio for credit cards dropped by 4 percentage points from 29% to 25%, according to Experian data.\nCredit utilization is the second most important factor in credit score calculations and is a measure of how much available credit a consumer is using on their credit card accounts at a given time. Those who can reduce their utilization could see higher credit scores—and thus typically better rates and terms when applying for credit.\nSource: Experian\nGiven that average credit limits shrank for many consumers this year, the fact that credit utilization is at a record low speaks to the transformative impact of paying down debt. Along with the decrease in credit utilization, the average U.S. consumer credit score also rose to a record high of 710 in Q3 2020. That's an increase of seven points since 2019.\nWhile credit utilization is not the sole driver of the national average credit score change, it plays a large role. The connection between the two can be seen when looking at the scores of consumers in top credit ranges.\nSource: Experian data from Q3 2020 END