Try searching for “average credit score” and you are likely to get different answers from just about every website you visit. Here’s why…
Going through the page one results on Google for the above term reveals that virtually every listing cited information that was either (a) incorrect, or (b) misleading.
The problem originates with the score being used…
- FICO — This is without a doubt the gold standard of credit scoring. When people talk about credit scores, this is what they are referring to in a generic sense (or at least, intend to be talking about). Unfortunately, FICO has become very secretive about their process and greatly restrict how their scores can be used.
- PLUS Score – This is a scoring model developed by Experian, and it’s geared solely toward 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.
- VantageScore – This scoring model ran on a scale of 500 to 990 until 2013, at which point it switched to a 300-to-850 scale to match FICO (which is a clear indication of how powerful the FICO brand has become). 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 use it far less than FICO.
Rather than identifying an average credit score as being a PLUS Score or VantageScore, almost all websites are using these scores interchangeably, without mentioning what type of score their data is using.
Here is the real story…
What is the true average credit score in this country? 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. It’s like asking what’s the average income in the US – the number of unemployed will totally skew the numbers (not to mention the throngs of millionaires).
If you want a better gauge of where you fit in, then you should be looking at the median credit score. Several years ago, FICO reported the median score as 723, but has been pretty silent on that front since. The median means it’s exactly in the middle: 50 percent of people have a lower score, 50 percent have a higher score. This will give you a much better idea of the credit score average for Americans and removes the massive bias of outliers.
If you still insist on knowing the current “average” then good luck on finding that out. FICO doesn’t report it.
Average credit score by state?
Ah… so this is where it can get confusing! 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.
As an alternative, let’s use the VantageScore, which Experian reports on each year. The VantageScore is not the same thing as a FICO score — and Experian reports the averages by metro area, rather than state. However, this information is still a good way to measure performance of geographic areas relative to each other.
As of November 2015 (the last time Experian annually updated its Experian’s “State of Credit” data), the national average VantageScore was 669. Remember, Vantage scores run from 300 (worst) to 850 (best). Here’s a list of the metro areas with the best scores, and those with the worst (as of November 2015).
Cities with the best average Vantage scores:
Mankato, Minnesota — 706
Rochester, Minnesota — 705
Minneapolis, Minnesota. — 704
Wausau, Wisconsin — 702
Fargo, North Dakota — 702
Cities with the worst average Vantage scores:
Greenwood, Mississippi — 612
Albany, Georgia — 622
Riverside, California — 624
Harlingen, Texas — 628
Laredo, Texas — 633
You probably notice that those cities with the lowest average scores tend to be in the southern half of the country (both the southeast and southwest). Meanwhile, the cities with the best scores are in the northern Midwest. The spread between the lowest- and highest-scoring city is 97 points. Maybe hotter temperatures drive people to spend more than they earn.
Average credit score by age group?
Lastly, there is credit score distribution by age. Our 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 mangle their credit during college and post-college years. It’s not until a bit later when they realize how much damage was inflicted and finally start managing their credit properly.
- 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 tend to have higher scores.
- Even if you never had major indiscretions 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.
It’s important to realize, though that you shouldn’t think you are doing well score-wise, 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 700s in your early 20s 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 600s or low 700s.
By the time you are in your mid-20’s it is entirely possible to get a credit score in the high 700’s or even over 800 if you play your cards right. A few of our forum members have even achieved this feat at a younger age.
How many cards do you have in 2016?
Without any loans whatsoever, many have achieved a high credit score after only a few years out of college – solely using credit cards. Obviously a mix of cards and loans is ideal, but if you have only one or two loans on your credit report, it can be an effective strategy to go heavy on the credit cards (have five to 10 if you can use them responsibly and stay debt free). At age 25 one of our members had around a dozen cards and a FICO score of 790! Many people don’t get that high after a lifetime of responsible credit use so there are obviously ways to work the system.
Looking to get more cards and use the same strategy? If you do, it is strongly recommended that 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.
Updated January 13, 2016