What is an average credit score. Anything in the 680 to 700 range will put your score right about average. FICO announced several years ago that the average FICO score is 692. More recent announcements have shifted to describing a median score of 723. More about how to interpret this number is included below.
Data from Experian. one the 3 major credit monitoring agencies today, also shows differences in credit scores by geographical regions. According to another survey performed by Mortgage Marvel, a site about mortgages, the lowest average credit score is 686 in Mississippi, and a whopping 754 in California. This is based on the Experian PLUS model (330 – 830), which is the third most popular type of credit score model today, behind the overwhelmingly popular FICO score and Vantage score models.
Since credit scores vary according to region, the better your score is relative to the others in your area, the more likely you will be able to meet the criteria of institutions find acceptable where you make an inquiry to determine your credit worthiness.
Besides geographical regions, average credit scores also vary by age. Younger age groups tend to have lower credit scores than older age groups. As an example, according to Experian, the VantageScore (an alternative to traditional FICO scores) for people in the 18 – 24 year old group was 672 compared to a national average of 751. You can also check out these Average Credit Score By Age Charts .
Average Credit Score vs. Median Credit Score
For people who are curious, there is a difference between an average and a median credit score. A median credit score is a truer indicator of whether your score is higher of lower than 50% of the population. An average score is the summation of all credit scores divided by the number of people included in the pool. The average number can be skewed lower by a few really bad credit scores.
FICO indicates that the median
credit score is 723. so if your credit score is above that, it means that you are doing better than 50% of the population. Nevertheless, if you have a credit score within the range of 680 to 700, it is still considered fair credit by most.
Whats an Average Credit Score? Where Can It Get You?
An average score of 680 and higher will get most of your applications approved. This is because in terms of risks, you are still within the acceptable business practice of most companies. Examples of approvals that you will meet include but is not limited to:
- Home loan applications
- Auto loan applications
- Insurance applications
- Membership applications (i.e. union, clubs, cooperative. etc.)
- Apartment offers
- Job offers
Aside from approval, the consumer will also be able to qualify for reasonable to prime rates depending on personal as well as other financial circumstances. The word “prime” indicative of the prime market, which is the rate of interest that banks give to their most favored customers. Currently, it is around 3.25%. This is as opposed to subprime rates that are very near, if not outright usurious.
An Average Credit Score Can Be Improved
Having a credit score that falls within an average or fair credit range of 680 – 700 is not bad. But most of us can do better and qualify for more deals plus save thousands of your hard earned money via lower interest rates. Our advice is don’t settle for average. If your credit score is below average, try to work it up to a good credit score level and beyond.
In the final analysis, knowing what an average credit score range is allows us to understand how we fare relative to the population. For some, it may be a wake-up call to raise your credit score ratings. It is better to ask the question now and assess your situation in preparation for future plans.