The average American has “good credit,” according to Experian, one of the three major credit bureaus.
The national average credit score is 688, Experian says.
Credit scores — using the popular VantageScore and FICO score models — can range from 300 to 850 with scores above 680 considered “good” by most lenders.
You’d need a credit score of 720 to have “very good credit” and a score of 780 to have “excellent credit.”
What Is the Average Credit Score In My State?
Minnesota leads the nation in average credit score, coming in at 709. Mississippi, with an average score of 647, comes in last.
Where does your state fall? Here’s the list of average VantageScore ratings by state:
- Alabama: 654
- Alaska: 668
- Arizona: 669
- Arkansas: 657
- California: 680
- Colorado: 688
- Connecticut: 690
- Delaware: 672
- Florida: 668
- Georgia: 654
- Hawaii: 693
- Idaho: 681
- Illinois: 683
- Indiana: 667
- Iowa: 695
- Kansas: 680
- Kentucky: 663
- Louisiana: 650
- Maine: 689
- Maryland: 672
- Massachusetts: 699
- Michigan: 677
- Minnesota: 709
- Mississippi: 647
- Missouri: 675
- Montana: 689
- Nebraska: 695
- Nevada: 655
- New Hampshire: 701
- New Jersey: 686
- New Mexico: 659
- New York: 688
- North Carolina: 686
- North Dakota: 697
- Ohio: 678
- Oklahoma: 656
- Oregon: 688
- Pennsylvania: 687
- Rhode Island: 687
- South Carolina: 657
- South Dakota: 700
- Tennessee: 662
- Utah: 683
- Virginia: 680
- Vermont: 702
- Washington: 693
- West Virginia: 658
- Wisconsin: 696
- Wyoming: 678
- District of Columbia: 670
You may have noticed a few trends. Warmer weather states — like Georgia, Louisiana, New Mexico, and Alabama — have lower average scores.
Northern states — like Vermont, Washington, and Massachusetts — have higher average scores.
Just to be clear: Your geography will not impact your credit score. You can have excellent credit in Mississippi and terrible credit in Minnesota.
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Credit Scores By Age Group
Your age group won’t directly impact your credit, but we can also see trends here. Older people tend to have better average credit scores.
This isn’t a coincidence. One of the factors VantageScore and FICO credit scoring models use to calculate your score is “length of credit history.”
Older people have longer credit histories. They’re also less likely to need new credit and less likely to have large mortgage balances or student loan balances pulling down their credit scores.
As a result, they have higher credit scores and can get lower interest rates on borrowing.
Here’s a generation-by-generation breakdown based on Experian’s data:
- Silent Generation (born 1925-1945): Average credit score of 729
- Baby Boomer Generation (born 1946-1964): Average credit score of 702
- Generation X (born 1965-1979): Average credit score of 658
- Millennials (born 1980-1999): Average credit score of 638.
Where Factors Affect My Credit Score?
We’ve already talked about your length of credit history’s impact on your credit score.
To get a higher credit score, try to keep your accounts open even after you’ve paid them off.
This way they can continue aging. This will help with 15 percent of your credit score.
Four other factors also affect your credit score:
- Payment History: This makes up about 35 percent of your score. Pay your bills on time every month and your payment history will boost your credit score.
- Available Credit: This makes up another 30 percent of your score. Keeping your credit card balances low — at about 30 percent of their credit limits — will help here. Also, keeping paid-off accounts open when possible can help your credit utilization ratio.
- Credit Mix: Having several different types of credit accounts can help increase this 10 percent share of your score. Mixing credit card debt with personal loans, auto loans, and a mortgage will help here.
- New Credit Inquiries: Any time you apply for new credit, the lender will run a hard credit check. Stringing together several hard credit checks within a year can lower your score. This makes up the last 10 percent of your score. So don’t apply for new credit unless you’re almost certain you’ll get approved.
VantageScore vs FICO score
The national average credit scores I’ve reported so far have come from the VantageScore model because Experian uses this model.
Experian, along with TransUnion and Equifax, the other two leading bureaus, created VantageScore back in 2006 to compete with the FICO score, the nation’s leading credit scoring model.
In fact, most lenders still rely more on your FICO score when they check your credit.
The good news is that the average American’s FICO score is a little higher than the average VantageScore. The average FICO score for Americans is 702 this year.
VantageScore and FICO credit score use the same credit score range — 300 to 850.
Where Does Your Credit Score Stand?
National averages tell us a lot about the shape of the average American’s credit life.
But average credit scores have no impact on your ability to borrow.
You’ll need to check your own credit score to find out where you stand.
To get your free credit score visit annualcreditreport.com. This site, operated by the Federal Trade Commission, can be your connection to all three credit reporting bureaus.
Normally, you’re entitled to one free credit report per year from each bureau. Through April of 2021, you can get a free credit report each week.
You can also download the Credit Sesame or Credit Karma app to keep an eye on your personal credit score.
These free credit monitoring services can show you data from your credit report.
A Good Credit Score Makes Life Easier (and Cheaper)
Maintaining a good credit score makes borrowing money easier and cheaper for Americans. Achieving an excellent credit score means you can almost set your own borrowing terms.
Interest rates on unsecured credit accounts such as credit cards and personal loans are higher for people with average or below-average credit. Credit limits are lower, too.
What does this mean? It means you can borrow more and pay less for your loans when you have a good credit score. A car loan with lower interest rates will cost less each month. You’ll have more money for other things.
Bad credit limits your loan options considerably. You may need a lender who specializes in bad credit loans.
Borrowers should always stay away from payday or title loans, though.
What’s the Credit Score to Get a Mortgage?
The average American credit score of 688 is typically high enough to qualify for a new home mortgage loan.
Since a mortgage loan is a secured loan, lenders can extend financing to borrowers with lower credit scores.
If you didn’t pay off the loan, the mortgage lender could seize your home, sell it, and pay off your loan. This is true for car loans, too.
A score of 620 is high enough for most mortgage lenders. Some specialized programs can finance a home buyer with a credit score as low as 580.
Your credit report isn’t the only qualifier for a new home loan. Your debt-to-income ratio and employment status will also matter.
But borrowers with good credit scores are off to a great start.
Learn More: What Credit Score Do You Need for a Mortgage
Ways to Improve Your Credit History
If you have very poor, poor, or average credit, it’s worth your time to improve your credit score. Scroll up to see the components of a FICO credit score and VantageScore.
Optimizing your personal finance life to make on-time payments and use less of your available credit will make your score rise — probably into a new credit score range.
But what if you can’t borrow money to begin with because of your very poor or poor credit?
Special Credit Accounts Can Help
I’d recommend getting a secured credit card. This kind of credit card requires you to make a security deposit. Your credit limit won’t exceed your deposit. So you won’t really be borrowing at all.
As a result, the credit card issuer won’t be taking much of a risk on you. You can use the card as you would any other credit card.
If you make regular payments and pay off the card every month, you’ll start building a solid credit history. You’ll have to pay an annual fee and you won’t get cashback perks. But within a year or so, your credit history will thank you.
I recommend the Open Sky Secured Credit Card.
Here’s another way to build credit: Ask your bank about a credit builder loan. These loans are risk-free for the bank so you can get them with very poor credit.
You’ll put proceeds from the loan in an account and the bank will draw out your payments automatically each month.
Just like with a secured credit card, you can build a solid payment history and start increasing your borrowing power.
Credit Repair Companies Can Help, Too
Credit repair companies can’t improve your personal finance habits for you. But they can help get negative information removed from your credit report.
Negative marks like late payments, missed payments, collection accounts, and charge-offs will pull down your score.
Sometimes these negative items include mistakes. Other times they’re entirely incorrect.
The credit bureaus are required by law to correct this kind of incorrect information if you ask them to.
A credit repair company can run interference for you, sending dispute letters, following up, and making phone calls.
You could do this work yourself. I recommend you do so, and you’ll find many posts on this blog explaining how.
But if you don’t have time or you’d rather spend your free time in other ways, consider a credit repair company instead.
I usually recommend Sky Blue Credit Repair and Lexington Law. Both of these firms have experts available to help you achieve a better credit score range.
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