Last Updated on November 12, 2020
Adults should know their credit scores, especially if they’re going to apply for a credit card or loan. Having a good to excellent credit score enables you to obtain better interest rates. You’ll also get approved fast by the lender because they’ll consider you a good borrower by looking at your credit score.
One of the most popular credit scoring systems is the Fair, Isaac, and Company (FICO). FICO scores range between 300 and 850.
- Very poor: 300 to 579
- Fair: 580 to 669
- Good: 670 to 739
- Very good: 740 to 799
- Excellent: 800 to 850
Major credit bureaus calculate your credit score by looking at pieces of information in your credit profile. Factors, such as payment history, credit utilization ratio, length of credit history, hard credit checks, and diversity of credit influence how good or bad your credit score will be.
In the United States, there are credit score trends by year, state, and age group. Data from 2005 to 2019 shows that the average FICO scores never made a significant drop. The highest average score recorded was in 2018, which reached 705.
The state with the highest average score is Minnesota (709), and the lowest is Mississippi (677). According to the data, geography shows to have a significant role in this particular trend. Nine of the 10 states with the lowest average score are in the Southeast, while 7 out of 10 states with the highest score are in the upper Midwest.
When it comes to age groups, it seems that folks who are 60 years old and up have the highest average credit score (749), and adults who are under the 20-29 age range have the lowest average credit score. These results have a strong correlation with the experience of the borrower: the older a person is, the more likely he/she has taken out credit.
Here’s an InfoGRAPHIC for you to know more about credit score trends in the United States.