Can you guess how much debt Americans have? Hint: It's the highest on record. According to the Federal Reserve Bank of New York, in Quarter 2 of 2023, American Household Debt rose to $17.06 Trillion. So, what contributes to that number?

Let's break it down.

In the latest quarterly report, Mortgage balances showed little movement at $12.01 trillion. Student loans were the only debt to show a quarterly decrease at a reported $1.57 trillion. All other forms of household debt- credit and retail cards, auto and consumer loans, show to be increasing.

Credit card debt increased nearly 5% over Quarter 1 of 2023 and for the first time on record broke $1 trillion. Auto loans continue to follow a steep, upward trajectory reporting at $179 billion. Other consumer loans and retail cards reported a $15 billion increase.

The average, unpaid credit card balance is $7,279, reported by LendingTree. Though, this year shows delinquency rates at a 20-year low.

Connecticut, New York, and New Jersey hold the highest credit card debt per state, each averaging over $9,000. Kentucky holds the title for state with the lowest average credit card debt at $5,400. See where your home state ranks. California holds the highest, total debt balance per capita.

How does credit work?

Credit allows you to make purchases and pay for them later. It's a financial commitment to repay the lender, plus interest, on a set timeframe.

What is a credit score?

In simple terms, a credit score is a number used to rate your credit risk and predict your credit behavior. Your credit score helps to quantify the risk for lenders. The score lets them know if you are a worthy borrower.

There are three main credit bureaus, Equifax, Experian, and TransUnion. A credit bureau provides borrower information to considering creditors. FICO is the most commonly used method used to calculate credit scores. What is a FICO score?

The average American has good credit with a FICO credit score of 716. It's no surprise that older Americans average the highest credit scores. While Gen Z (18-25 year olds) have the lowest average scores.

What factors into your credit score?

FICO Credit Scale | Certified Mail LabelsCredit scores are comprised of several factors: New credit, credit mix, credit history, credit utilization, and payment history.

New Credit: Hard inquiries, such as new loan and credit applications, account for 10% of a FICO score.

Credit Mix: The types of credit, such as loans, credit cards, and collections, account for 10% of a FICO score.

Credit History: The length of time credit accounts have been open accounts for 15% of a FICO score.

Credit Utilization: The total amount owed compared to the credit limit accounts for 30% of a FICO score. This figure changes based on monthly payments.

Payment History: If and when payments were made accounts for 35% of a FICO score.

Key Take Away: Paying your bills on time is the largest component of good credit. Late or skipped payments hurts your credit.

Why is good credit important?

Good credit is important, because bad credit is costly. A low credit score often means higher interest rates and security deposits. As well as unable to qualify for a loan.

Credit reports littered with delinquent payments, repossessions, foreclosures, and bankruptcy can take years to improve. However, it's always possible to improve your credit score.

What should I do to repair my credit?

Individuals working to repair their credit are often tempted by credit repair services. These companies promise the fastest way to repair your credit.

Unfortunately, the Federal Trade Commission reports that credit repair scams are extremely common. If you decide to utilize a credit repair company, be sure to review the Credit Repair Organizations Act (CROA).

Instead, the following tips will personally put you on a solid path to credit success.

  1. Monitor your credit report. Knowing exactly what is on your credit report is the first step in developing an action plan. Legally, Equifax, Experian, and TransUnion are required to provide a free annual credit report upon your request. Due to COVID-19, the three reporting agencies are offering free weekly credit reports.

Regularly obtaining a copy of your credit report is a good idea. This practice ensures correct reporting and prevents fraud. Click here, to request your free credit report.

  1. Fraud Prevention. If you notice any errors on your credit report, whether from identity theft, fraud, or reporting, immediately contact the reporting agencies. The Fair Credit Reporting Act states that reported information on your credit report must be accurate.

In addition to contacting the reporting agencies about the error, you may also file a complaint with the Consumer Financial Protection Bureau.

  1. Responsible Bill Pay. Begin with any accounts in collections as this will make the biggest impact on your credit. Delinquent accounts hold a lot of weight on your credit score. Making regular payments, on time each month is the best way to improve your score.

Late payments impact your credit history. Your credit report will be noted 30 days after a payment is missed. An increased interest rate will be applied 60 days after a payment is missed. Fees associated with a tardy or missed payment only take away from funds that could be going toward the debt itself.

  1. Proactively Manage Your Money. Tracking your expenses and monthly planning is a proven aid to financial stability. There are many helpful apps for budgeting.

Most financial planners also suggest having an emergency fund. Accessing a savings fund provides freedom from credit cards and personal loans when unexpected events happen.

  1. Credit Counselors. If you need direction as you navigate your credit repair journey, a credit counselor can help. Credit Counselors equip you with resources and aid you in creating a course of action to tackle your debt repair. Contact the National Foundation for Credit Counseling (NFCC) for assistance.

Template for Credit Dispute Letter

Documentation to dispute errors and inconsistencies is important. Prepare and submit a letter and the documents to the credit reporting agencies and the provider of the inaccurate information. Oftentimes, the provider is the banker, lender, or credit card company.

The following template can help when composing a letter to dispute an error on your credit report.

Your Name
Street Address
City, ST ZIP Code

Company Name
Street Address
City, ST ZIP Code

To Whom It May Concern:

A recent review of my credit report showed that [INSERT COMPANY NAME] provided inaccurate information to [INSERT CREDIT BUREAU]. I wish to formally dispute this error.

I have attached a copy of my credit report for reference. The disputed items have been noted.


  I greatly appreciate your immediate assistance in investigating and rectifying this error. Please contact the
  National Credit Bureau to have the issue corrected immediately.

Thank You,


Your Name
Contact Number
Email Address


How to Send the Letter

The Federal Trade Commission acknowledges and instructs those disputing report errors to send correspondence via Certified Mail.

Certified Mail provides proof of mailing and delivery.

Why Send Certified Mail

Quickly and easily Send Certified Mail completely online, here. Just upload a copy of your PDF letter file and we will print, pack, and mail the correspondence the same-business-day on your behalf.

Send Certified Mail provides 10-year access to a copy of your letter, proof of USPS Certified Mail acceptance, in-route delivery tracking, and the Electronic Delivery Confirmation. Optional USPS Return Receipt Signatures is also available. Receive delivery notifications straight to your inbox at no additional cost.

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