Average Credit Scores – How Do You Measure Up?

Lenders use average credit scores as a guide when evaluating the level of risk a borrower represents when they apply for new, additional, or extended lines of credit. In other words, how does the applicant measure up against others with their history of credit management?

Credit scores can fall anywhere between a low of 300 to a high of 850 points. According to the Fair Isaac Corporation (FICO) the median credit score is 723 points (half of scores above and half of scores below). According to credit bureau Experian, average credit scores are 678.

Most lenders rely on the Fair Isaac Corporation (FICO) score model, not the Experian model. Even though the Fair Isaac Corporation model uses median credit scores in their calculations, the result of 723 is commonly or mistakenly referred to as average credit scores.

Sixty percent (60%) of the U. S. population have credit scores that fall between 650 and 799. Approximately 13% have average credit scores above 800.

Below is a ranking of credit score ranges and how FICO scores impact lender decisions.

  • 750 to 850 – Very High – Individuals in this range will easily be approved for credit and will pay the lowest interest rates.
  • 720 to 749 – High – These scores are still considered indicators of a good credit risk. Interest rates may be slightly higher than for the “very high” scores.
  • 700 to 719 – Good – Scores in this range qualify for credit but may pay somewhat higher interest rates.
  • 500 to 699 – Low – If your credit scores fall in this range, you will end up paying more in interest than someone in the above categories for the same loan. You may still be able to get credit but it will cost you more.
  • 350 to 499 – Very Low – If your credit score is under 500, you stand an excellent chance of being rejected for credit. If you are approved, you will have to pay the highest interest rates.

As you can see, if your average credit scores are 720 or higher, you are in good standing with lenders, and should have no trouble qualifying for credit. The further you drop below 720, the more trouble you will have getting credit, and the more you will pay in interest when you do get it.

If low FICO scores are keeping you from getting the credit you want, see how lots of people just like you have raised their FICO scores 100 to 200 points and more in a short period of time. You can too!