43% Of Robinhood Users Have A FICO Below 650, Have Increased Investment By 2x In Spite Of Pandemic

  • Robinhood users’ account balances have grown nearly 350% over the last 12 months
  • 43% of Robinhood users have a FICO score less than 650, with an average account balance of $3,655.10 as of Jan 2021
  • High-FICO score Robinhood users have a 4x greater average account balance than low-FICO users as of Jan 2021 ($14641.50 vs. $3,655.10)

Robinhood has been making headlines lately for being at the center of huge stock market disruptions. The free-trading app that lets investors trade stocks without paying commissions or fees has been integral to a Reddit-coordinated disruption of hedgefund short-sellers that has caused stocks like GameStop to surge to as much as $347 per share.

recent Wall Street Journal article looked at some of the reasons the Reddit investors flocked to GameStop, finding that many were motivated by debt relief — a common concern among people with lower FICO scores. The Reddit/GameStop news has been covered extensively elsewhere, but we thought this might be time to take another look at Robinhood and its users, particularly those with lower FICO scores.

We previously looked at how Robinhood exceeded expectations and saw massive increases in investments in the early days of the COVID-19 pandemic. This time around, we wanted to take a closer look at how Robinhood stacked up against other major trading platforms and how users were investing by FICO score.

Average Monthly Balance by Brokerage

Since hitting the scene in 2013, Robinhood has become one of the major players in the stock trading game. Though it doesn’t have the half-century history of some platforms, it’s still racked up an impressive 13 million users over the last seven or so years.

2020, and now 2021, have seen vast increases in deposits to trading platforms. There has been a lot of liquidity in the market as COVID-19 restrictions have resulted in decreased spending in many parts of the economy, while Federal stimulus has provided opportunities for demographics, such as low-FICO users, to start investing at rates not previously seen.

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