Credit scores of millennial borrowers were all over the map in May, with those in some rural areas having surprisingly high FICO scores compared to those in larger metros, according to the Millennial Tracker released by Ellie Mae.
Millennial borrowers who closed loans during the month have average credit scores that significantly differed across the US. Averages ranged from 662 in Madisonville, Ky., to 757 in San Francisco.
“You would expect to see higher average FICO scores in the largest coastal metropolitan cities where loan amounts are higher, which we do see in areas such as San Francisco (757), Los Angeles (745), Boston (701) and Miami (722); however, there are some surprisingly high numbers in more rural areas, such as Mitchell, S.D., where the average FICO for millennials was 735 in May, higher than Boston or Miami,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae.
Tyrrell cited another Ellie Mae survey which found that many in the demographic have a strong misperception about needing a perfect credit score to qualify for a home loan.
Despite the regional differences, millennials’ average FICO scores for closed loans during the month remained unchanged at 721 for the third consecutive month. This is the lowest average for the group since April 2017.
Millennials took out slightly more purchase loans during the period, ticking up to 90% from 89% in April. Refinances slipped to 9% from 10%, while 1% remained unspecified month-over-month. Conventional loans remained the most popular product for the group at 68% of total closed loans in May.
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