Making comparisons is human nature. It can help to know as you build and grow your credit history to achieve your personal finance goals, exactly what “typical” looks like. According to Experian, the average credit score in the U.S. is 705, which is considered good credit by most lenders.
Average U.S. Credit Score
Your financial activity is tracked by three major credit reporting agencies: TransUnion, Equifax and Experian. But your FICO score, that three-digit number that lenders look at when deciding whether to approve your loan application, is calculated by Fair Isaac Corporation using five factors. Those factors are your payment history, your debt, the length of your credit history, your account types and recent credit activity.
For most Americans, that three-digit score will be in the “good” range. In the first quarter of 2020, the average credit score in the U.S. was 705. If your score ranges from 670 to 739, it’s good, while 740-799 is very good. If your score is 800 to 850, it’s one of the rare exceptional scores.
It can also help to know the FICO scores that many lenders see as fair and very poor. The very poor range is from 300-579, with 300 being the lowest a score can go. A fair credit score can also deter some lenders. It ranges from 580 to 669.
Average Credit Score by Gender
One of the biggest gender discrepancies over the years has been in credit scores. Since the passing of the Equal Opportunity Act of 1974, the financial services industry has made a concerted effort to level the playing field for women. This increased opportunity for women seems to have paid off.
During the first quarter of 2020, women and men both had a national average credit score of 705. For women, this number increases one point since the same time a year before. Both men and women have seen an increase of about 10 points since the second quarter of 2015.
Average Credit Score by Age
If you’re struggling to achieve a credit score that lenders will like, it may just be a matter of time. According to data gathered by WalletHub, the average credit score improves with age. This improvement makes sense since the length of your credit history is one of the five factors used to generate that score.
Interestingly, millennials are credited with boosting the overall credit score in recent years. According to Experian, millennials, who are adults between the ages of 24 and 39, had an average FICO score of 668 in 2019. The average age to reach a score of 700 is also at an all-time low, at 54. Nine years ago, that average age was 62.
Here’s the average credit score by age:
- 20-29: 662
- 30-39: 673
- 40-49: 684
- 50-59: 706
- 60+: 749
Average Credit Score by State
When it comes to a good credit score, where you live could be important, as well. Those who live in the South tend to be at a disadvantage, statistically, with an average credit score that’s a full 20 points lower than those who live anywhere else.
The average credit score by region is as follows:
- South: 667
- Northeast: 687
- West: 687
- Midwest: 688
If you’re looking for a winner, though, it’s clearly Minnesota, with an average credit score of 711. North Dakota and South Dakota hold their own, as well, at 706 and 705 respectively. Economic opportunities and cost of living obviously play a role in this, but there’s no reason people can’t boost their credit scores no matter where they live.
Average Credit Score by City
Location-wise, it can help to narrow down the average FICO score even further. The highest credit score is found in Honolulu, where scores average 716. Since Hawaii is the most expensive state to live in, according to CNBC, this helps strengthen the thinking that cost of living plays a role in credit score averages.
As for the lowest averages, they're found in Newark, at 610, and Detroit, at 591. In particular, Detroit, has been hit hard in recent years, with four in 10 working Detroit residents remaining laid off from their jobs in mid-July, according to information gathered from the U.S. Bureau of Labor Statistics and a survey conducted by the University of Michigan.
Average Credit Score by Income
In addition to age group, gender and geographic location, how much someone makes affect a person's credit score. Although the wealthy certainly aren’t immune to credit-destroying financial troubles, overall, higher earners tend to see their scores tick upward.
The average credit score among those with annual incomes of $50,000 to $74,999 is 737, which is on the high end of the “good” range. Those earning between $30,001 and $49,999 average 643, which falls near the middle of “fair” credit. Those earning $30,000 or less still average “fair,” at 590, but it’s on the low end of that range.
History of U.S. Credit Scores
Things are on the upswing, though, which can be seen in how average credit scores have increased over the years. An average credit score of 705 is great, but it’s especially notable when you take into account that the average exceeded 700 for the first time ever in 2018. It reached 703 in 2019.
The year-by-year tally of average FICO scores in the U.S. is as follows:
- 2005: 688
- 2006: 690
- 2007: 689
- 2008: 690
- 2009: 687
- 2010: 687
- 2011: 688
- 2012: 690
- 2013: 691
- 2014: 692
- 2015: 695
- 2016: 699
- 2017: 699
- 2018: 701
- 2019: 703
- 2020: 705
Average Credit Card Debt
Although it’s good news that credit score averages are increasing, this could have to do with growing credit utilization. Credit card debt has been gradually rising at the same time that scores are going up. In fact, between 2010 and 2020, credit card debt increased a whopping 20 percent, for an unprecedented high of $1.1 trillion, according to a study from CompareCards.
A study from Experian revealed that the average credit card debt increased from $6,040 to $6,194 from 2018 to 2019, a 3 percent increase. But the good news is, those with credit cards have a higher FICO score, at 727. Since 67 percent of Americans carried a credit card in 2019, that could partly account for why FICO scores are up overall.
Average Personal Loan Debt
If there’s a personal loan on your credit report, you aren’t alone. Over the past 10 years, non-mortgage loans have increased by 3 percent each year on average. They continued to be the fastest-growing debt category in 2019. Still, only 25 percent of Americans had an active personal loan in 2019, compared to 67 percent that have a credit card.
Even as personal loans increased, the average balance on those loans dropped slightly, from $16,345 in 2018 to $16,259 in 2019. It’s important to note, though, that at the same time, other types of loan balances increased, including auto loans, up from $18,945 in 2018 to $19,231 in 2019, and mortgage balances, up from $198,377 to $203,296.
Average Student Loan Debt
One issue that’s hurting millennials, though, is student loan debt. Over the past decade, the average amount borrowed has seen a steady increase, going from $23,765 in 2009 to $30,062 in 2019, according to U.S. News & World Report. That’s a 26 percent increase over the past decade, due in part to increasing tuition costs.
One thing that could be pushing millennials down a faster path to excellent credit is that slightly fewer are taking college loans. A decade ago, 68 percent took loans. That number was down 3 percent by 2019, at 65 percent. In recent years, the increase in loan balances has slowed considerably, increasing only 1 percent between 2018 and 2019.
Required Credit Card Scores
Credit score range requirements vary by lender, but credit card issuers are often more lenient than other types of lenders. Other factors like your income and payment history may be weighed into the decision, but generally speaking, your options start to improve once you reach the “good” range, which starts at 670.
It’s important to note, though, that even though you may be approved with a lower credit score, you may find you pay higher interest rates and have a lower credit limit than those with higher scores. You can also apply for a secured credit card, which has you put a deposit down first. This payment acts like a security deposit on a rental property in that it allows the creditor to recoup some of the cost if borrowers don’t pay.
There are other options if your credit isn’t 670 or above. If your credit is in the “fair” range, you may consider a credit mix. For instance, you may be able to qualify for retail store cards, which typically come with a higher interest rate and can only be used with a specific retailer. You can also start shopping around for cards specifically for those looking to improve their credit, especially if they’ll let you monitor your score as you go.
Required Scores for Mortgage
Often when you really start thinking about your credit score is when it’s time to buy a house. To get a mortgage, you’ll need a down payment, an income and a solid credit history. The length of credit history can also be a factor. This includes your credit score, although this is only one of many factors lenders will use to make a decision.
If you’re going for a conventional loan, the current magic number seems to be 620, which is in the “fair” range. But if you’re still below 600, don’t count yourself out. You can get an FHA loan, which only requires a credit score of 500 if you put 10 percent down. FHA loans are also great because you can get the loan with only a 3.5 percent down payment as long as you have a credit score of 580 or more.
Required Scores for Other Loans
If you want to join the 25 percent of Americans who have personal loans, you’ll probably need a slightly stronger credit score. You can find loans for lower than the typical minimum of 670 for personal loans, but you may have to put down a security deposit. You may also find with a lower credit score, you’re charged a higher interest rate or limited on how much you can borrow.
Personal loans and plastic aren’t the only kinds of credit accounts. Your credit score will also come into play if you want to take out a loan to purchase a vehicle. There is no set number for qualifying for an auto loan, but if your score is 670 or better, you should be good. It’s also important to note that FICO provides scoring models specific to the auto industry, and these scores are geared toward the likelihood that you’ll pay an auto loan on time each month, so reliably paying your bills is more important than ever.
Read More: How Much Will Credit Score Improve After One Year of Paying on a Car Loan?
Credit scoring models can change at any time, so the best thing you can do is practice good financial habits that will keep your score strong. Your payment history and length of credit also play a role in your score. That means good behaviors, day after day, month after month, year after year, will give you the best chance no matter how lenders and credit bureaus gauge things.
- CNBC: Women Now Have the Same Average FICO Credit Score as Men—Here’s What It Is
- Wells Fargo: How Your Credit Score Is Calculated
- Experian: What Is a Good Credit Score?
- WalletHub: What Is the Average Credit Score in America?
- CNBC: America’s 10 Most Expensive States To Live in 2019
- Bridge Michigan: Detroit Unemployment Rate ‘Alarmingly’ High Amid Coronavirus
- USA Today: Here's a Top Reason Americans Are Carrying an Average Credit Card Balance of Over $6,200
- Experian: 2019 Consumer Credit Review
- U.S. News & World Report: What Credit Score Do I Need to Get a Credit Card?
- Experian: What Credit Score Is Needed for a Personal Loan?
- Experian: What Credit Score Do I Need for an Auto Loan?
- Fair Isaac Corporation. "What is a Credit Score?" Accessed Oct. 11, 2020.
- VantageScore Solutions, LLC. "Who Uses Credit Scores?" Accessed Oct. 11, 2020.
- VantageScore Solutions, LLC. "Free Score Providers." Accessed Oct. 11, 2020.
- Fair Isaac Corporation. "What's In My FICO Scores?" Accessed Oct. 11, 2020.
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.