If you’re wondering what the average credit score is, you’re probably really wondering how your credit score compares to others. You may also be wondering if it’s good enough to get approved for a loan or a credit account. While the average credit score sounds like a simple enough figure to pin down, it’s a little more complicated than you may realize. See, there are a lot of different credit scoring models out there. Most follow a range of 300 to 850, but there are some exceptions, and, even if ranges are similar, the scores each model generates based on what’s on someone’s credit report can vary as well. So, pinning down a true average credit score can be downright impossible, but there are some markers out there that can give you an idea of where it may fall. For instance, according to Experian’s seventh annual State of Credit report, the nation’s average credit score was a 673 in 2016. That’s based on the VantageScore 3.0 model, which follows the 300 to 850 range. And the national average FICO score, which also follows a 300 to 850 range, hit 699 in April 2016, an all-time high.
How can you find out if you have an average credit score? Well, let’s break it down.
What’s My Score?
First things first. If you want to know how strong your credit is, you’ll need to know your credit score. You can find out by using Credit.com’s free credit report snapshot, updated every 14 days. Not only will you get a truly free credit score, you’ll also find out how your credit score compares to state and national averages.
Another thing you’ll need to know when comparing your number to others is which credit score model is being used to calculate the score, and what credit score range is being used. To reiterate, there are many different credit score models, including versions of Vantage Score, FICO scores and even educational credit scores. Some of these have different credit score ranges, so while VantageScore 3.0 and FICO scores run from 300 – 850, there are others that may run from 501-990 or 360–840, for example. You can generally find out what score’s in use by looking at the sheet or site on which the score is being supplied.
What’s a Good Score?
Again, different models have different ranges, and lenders make their own decisions about what they consider acceptable. The scores typically range from 301 to 850, with categories from bad to excellent. Here’s how the credit tiers generally break down:
- Excellent Credit: 750+
- Good Credit: 700-749
- Fair Credit: 650-699
- Poor Credit: 600-649
- Bad Credit: below 600
Again, what’s considered a good or fair credit score will depend on how the lender views it, but you can get an idea of how lenders are likely to view your applications by checking your score and seeing how it compares to others.
Moreover, you can build good credit by focusing less on the numbers and more on what’s weighing them down. Most credit scores consider the same five major factors:
- Payment History
- Amount of Debt You Owe
- Length of Credit History
- Mix of Credit Accounts
- New Credit Inquiries
So, for instance, if you’re carrying a lot of debt, you may want to focus on paying some of your credit card balances down. If you’ve got a lot of credit inquiries on your credit report, you may want to hold off on applying for new credit for at least six months to a year. And, of course, you can always improve an average credit score by making all payments on-time, keeping debts low and adding new accounts as you can handle them.