Try searching for “average credit score” and you are likely to get different answers from every website. Here’s why…
I just went through the top 10 listings on Google for the above term and it was alarming to see that virtually all of them were citing information that was either (a) incorrect, or (b) misleading.
The problem starts with the scores they are using…
- FICO – This is without a doubt the gold standard of credit scoring. When people talk about scores, this is what they are talking about (or at least, intend to be talking about). Unfortunately, FICO is pretty tight-lipped about it and greatly restricts its usage.
- PLUS Score – This is a scoring model developed by Experian which is geared solely towards consumers (it’s not used by creditors). Instead of running on a 300 to 850 scale like FICO, it runs on a 330 to 830 scale. It’s peddled through FreeCreditScore.com.
- VantageScore – This runs on a 501 to 990 scale. It was developed a few years ago by the major credit reporting agencies (Equifax, Experian, and TransUnion) to compete with Fair Isaac’s industry-leading FICO formula. However, VantageScore hasn’t really caught on and lenders very rarely use it.
Rather than identifying an average credit score as being a PLUS Score or VantageScore, almost all websites (even large authority sources) are using these scores interchangeably, without mentioning what type of score their data is using.
For example, one top site tells us the average credit score in the United States is 692 for FICO. Then, it proceeds to give a state by state breakdown, without specifying that they’re actually using PLUS scores for the individual states instead of FICOs (obviously not an apples-to-apples comparison).
Here’s the truth…
What is the average credit score? Well that’s really not even a question you should be asking. Why? Because those with ultra-low scores (due to a bankruptcy, foreclosure, etc) are going to have scores significantly lower – these drag down the average number big time.
If you want a better gauge of where you fit in, then you should be looking at the median credit score which is 723 for FICO (and has been reported as such for many years in a row). The median means it’s exactly in the middle: 50% of people have a lower score, 50% have a higher score. This will give you a much better idea of the credit score average for Americans.
If you still insist on knowing the current “average” then good luck on finding that out. A few years ago FICO cited the 692 figure but they’ve remained silent on what is the average ever since. Translation? FICO no longer reports the average, so there’s no way to know 100% for sure. However being that the median has remained 723 for years, I believe it’s safe to assume that the average is still pretty darn close to 692.
Average credit score by state?
Ah… so this is where it gets tricky! FICO doesn’t release a state by state breakdown of score distribution. So in order to judge their performance, we have to turn to a different scoring model unfortunately.
As an alternative, let’s use Experian’s PLUS Score. Why? Because they publish the PLUS scores by state and since they are among the largest credit reporting agencies, their sample size is obviously huge. However keep in mind they run on a 330 to 830 scale and therefore are NOT the same as FICOs. However, this information is still a good way to measure performance of states relative to each other.
As of December 2011 Experian’s National Score Index reports a 687 PLUS Score as the average in the United States. I’ve organized the data below and marked those states which are at or above average as green, and those below in red.
- Alabama – 676
- Alaska – 684
- Arizona – 676
- Arkansas – 677
- California – 687
- Colorado – 692
- Connecticut – 705
- Delaware – 680
- Florida – 678
- Georgia – 670
- Hawaii – 700
- Idaho – 694
- Illinois – 693
- Indiana – 686
- Iowa – 708
- Kansas – 697
- Kentucky – 680
- Louisiana – 670
- Maine – 702
- Maryland – 687
- Massachusetts – 710
- Michigan – 688
- Minnesota – 718
- Mississippi – 668
- Missouri – 690
- Montana – 709
- Nebraska – 708
- Nevada – 660
- New Hampshire – 711
- New Mexico – 676
- New Jersey – 699
- New York – 697
- North Carolina – 679
- North Dakota – 715
- Ohio – 690
- Oklahoma – 676
- Oregon – 698
- Pennsylvania – 700
- Rhode Island – 700
- South Carolina – 671
- South Dakota – 714
- Tennessee – 679
- Texas – 667
- Utah – 694
- Vermont – 712
- Virginia – 694
- Washington – 700
- Washington DC – 679
- West Virginia – 680
- Wisconsin – 707
- Wyoming – 695
You probably notice that those states with the lowest average scores tend to be in the southern half of the country (both the southeast and southwest). Meanwhile, many states in the Midwest and New England have above-average.
- Nevada has the lowest credit score at 660 – that’s 27 points below the U.S. average.
- Minnesota has the highest at 718 – which is 31 points above the U.S. average.
- The spread between the lowest and highest state is 58 points.
Average credit score by age group?
Last by not least, the brings us to score distribution by age. I think my friends over at Credit Karma have the best data set available for showing average credit score by age. Although it’s not FICO, they use a credit scoring system which correlates closely – TransUnion’s TransRisk model. Like FICO, it runs on a 300 to 850 scale.
The first thing you probably conclude from looking at that is the older you get, the more your score will go up on average. There are a few reasons for this:
- Let’s be honest here… there are many people who screw up their credit during their college/younger years. It’s not ’til a few years later when they realize how much they messed up, and in turn, they finally start managing it properly (but by this time they’re older).
- Credit scores (FICO and competitors) all take into account the age of your credit history and accounts. The longer the [positive] history, the more it will help your score. This is a reason why adults who have had accounts for decades tends to have higher scores.
- Even if you never had major screw-ups with your credit as an early adult, as you get older, you [hopefully] start building up a nest egg and paying down debts like your mortgage, student loans, etc. This of course helps your score.
I would like to warn you though that you shouldn’t think you are doing good just because you are above average for your age group. Sure the average may be 638 for the 18 to 24 age group but truth be told, you can somewhat easily hit the low 700′s by the time you are 20 if you do things right. Just check the forum and you will see people who are 18, 19, and 20 with FICOs either in the high 600′s or low 700′s.
By the time you are 25 to 27, in my personal opinion there is really no excuse for not having an 800 or close to it.
How many cards do you have in 2013?
Without any loans whatsoever, I achieved a high credit score by my mid-twenties solely using credit cards. Obviously a mix of cards and loans are ideal, but if you only have one or two loans on your credit report, then I would recommend going heavy on the cards (have 5 to 10 if you can use them responsibly and stay debt-free). At age 25 I had around a dozen cards and a FICO of around 770 to 790.
Looking to get more cards and use the same strategy I did? If you do, I would strongly recommend you only go with no annual fee cards. That way you can keep them open for the long haul and won’t have to worry about an annual fee. For cards that are used sparingly, that’s the way to go.
Here are a couple of my favorite no annual fee cards in 2013: