US Credit Card Debt Hits Record $1.29 Trillion as Millions With Limited Credit Histories Face Loan R

By yourNEWS Media Newsroom

WASHINGTON — Americans are carrying a record $1.29 trillion in credit card debt, while millions of adults with little or no borrowing history face difficulties obtaining loans and credit cards, highlighting a credit system that evaluates repayment history rather than income, savings or debt-free status alone.

The Federal Reserve Bank of New York reported Nov. 10 that outstanding credit card balances reached $1.285 trillion during the third quarter of 2026, increasing $22 billion from the previous quarter and $52 billion from a year earlier.

Total household debt increased $334 billion during the quarter to $19.1 trillion, including mortgages, student loans, auto loans, credit cards and other consumer borrowing.

The figures come as banks and other lenders continue relying heavily on credit scoring systems to determine eligibility for credit cards, mortgages and personal loans. Such systems can disadvantage applicants who have substantial income or savings but lack a documented history of borrowing and repayment.

According to an October 2025 Federal Reserve report on credit access, approximately 32 million American adults cannot be assigned a conventional credit score. That includes an estimated 25 million consumers with thin credit files and another 7 million considered credit invisible because they lack a credit history.

Together, those groups represent approximately 12.5% of the adult population examined in the report.

Credit scoring models generally evaluate payment history, outstanding debt, the length of credit history, credit utilization and other characteristics recorded by credit reporting agencies.

Income and personal savings are not directly included in traditional FICO credit scores, although lenders may separately consider those factors when reviewing applications.

Consequently, an individual earning more than $100,000 annually, maintaining substantial savings and carrying no debt may still have difficulty qualifying for certain credit products if the person’s credit report contains insufficient information.

A consumer who regularly uses credit cards and pays balances on time, meanwhile, may have a more established credit profile even if that individual earns less money or maintains a larger outstanding balance.

The Federal Reserve identified this distinction as an obstacle for consumers who are financially capable of repaying loans but have not previously used enough credit to establish a measurable repayment record.

The agency’s report described the potential benefits of alternative financial data, including information about bank account transactions, rental payments and utility bills, which could help lenders evaluate applicants with limited conventional credit histories.

Researchers identified a group of borrowers sometimes described as “invisible primes,” referring to consumers whose traditional credit records do not adequately reflect their ability to repay loans.

The Consumer Financial Protection Bureau examined the issue in a June 2025 research update, revising earlier estimates of Americans without credit records or sufficient information to generate credit scores.

The bureau found that updated data and methodological changes reduced its previous estimate of completely credit-invisible consumers while increasing the estimated number of people whose existing credit records remained unscorable.

Limited credit histories can affect individuals who avoid borrowing, recently entered the United States, have never obtained a credit card or stopped using credit accounts for extended periods.

Younger adults and people who have historically relied on cash or debit cards may also have limited information available to traditional scoring models.

The problem is separate from having a low credit score. Consumers with thin files may have no conventional score at all, making it difficult for automated lending systems to assess their creditworthiness using standard criteria.

At the same time, the Federal Reserve’s latest household debt figures show continued growth in borrowing among consumers who already have access to credit.

Credit card balances increased 1.7% during the third quarter, while auto loan debt rose $21 billion to $1.73 trillion. Student loan balances reached $1.66 trillion, and mortgage balances totaled approximately $13.4 trillion.

The share of outstanding household debt in some stage of delinquency increased to 5% at the end of September, up from 4.7% in the previous quarter.

However, the annualized rate at which credit card balances transitioned into serious delinquency, defined as 90 days or more past due, declined from 7.05% in the third quarter of 2025 to 6.87% in the same period of 2026.

The figures indicate that overall credit card balances continued increasing even as the rate of newly serious credit card delinquencies improved modestly.

A separate Federal Reserve report on household financial well-being found that 33% of adults applied for credit in 2025, the lowest share recorded since the survey began tracking credit application outcomes in 2015.

Among applicants, approximately one-third were either denied credit or approved for less than they requested. That proportion was five percentage points higher than in 2021.

Researchers also found that increases in credit card balances were concentrated among households reporting financial difficulties.

Consumers who said they were living comfortably experienced comparatively little growth in their average card balances, while those struggling financially recorded substantially larger increases.

The findings illustrate two different challenges in the American lending system: rising borrowing costs and debt burdens for some consumers, and limited access to credit for others whose financial circumstances are not adequately captured by traditional credit records.

Financial institutions have increasingly examined alternative credit scoring methods designed to incorporate additional information, including recurring payments and bank account activity.

Such approaches may allow lenders to assess consumers who lack sufficient borrowing histories, although access to alternative scoring programs varies among financial institutions and loan products.

Federal researchers have also emphasized that credit card balances alone do not establish whether individual households are financially distressed. Some consumers pay their balances in full each month, while others carry debt and incur interest charges.

The $1.29 trillion figure represents outstanding balances reported to credit bureaus, not the total amount of unpaid, interest-bearing credit card debt.

As lenders continue evaluating alternative data and automated underwriting systems, the Federal Reserve’s findings show that millions of Americans remain outside conventional credit scoring models despite the country’s expanding use of consumer credit.