Updated: Mar 8
As of 2020 The average FICO Score in the U.S. is 711
FICO Score (Fair Isaacs Corp.) is the most widely used credit score model. It was created in 1956. There are 10 versions of FICO, they typically range between 300-850 and are used to determine your risk factor.
What is the Average Credit Score Today?
Its amazing after a financial crisis and in the midst of a pandemic the average credit score is at an all time high of 711 according to FICO. A score of 711 is considered in the range of prime rates (660-719) for credit scores. When Lenders make a decision they use following categories to rate your credit profile.
800 to 850: Exceptional
740 to 799: Very good
670 to 739: Good
580 to 669: Fair
300 to 579: Very poor
Credit Score and Credit Profile
When lenders make a decision they are not only looking at your score they also review the report itself when making decisions. Many consumers are shocked when they are denied and have a prime credit score (660-719). Something as simple as a recent collection or recent late payment would cause an automatic denial for some lenders. Mortgage lenders in particular will deny a client with a late payment within the past 6 months even with a high enough credit score.
What Factors Determine your credit score?
Your credit score is determined by the following Categories.
Payment history (35%),
Amounts owed (30%)
Length of credit history (15%)
New credit (10%)
credit mix (10%).
Are Lenders the only places that Look at Credit Scores?
The answer is No. Employers, Insurance companies, Residential Rental companies, Utilities, and even car rental services look at your credit score. Also in some states to become licensed in a profession such as an attorney, the credit rating is also a factor.
How To Improve your Credit Score?
You can improve your credit score multiple ways. Many online guides are meant for general purposes and may not apply to a specific situation that you may have. Below are the Top 5 in which we see the most benefit for consumers to increase their FICO scores.
Carry a Credit card Balance of 1-10% of the Credit Limit ($1,000 Credit Limit balance should be $1-$100)
Have At least 4-5 Credit Cards Open with Minimum of 6-12 months history
Make At least 6-12 months on time Payments on your Loans and/or Credit Cards
Not Applying for credit for minimum 6 months (No New Inquiries)
Credit Repair- In some cases items hurting your credit score can be removed. Speak with a professional first.
Knowing your credit score is very important especially in today's economic climate. Negative items will cause denials and low score ratings for consumers. At Valiant Credit Services we specialize in the removal of negative items and also help improve our clients scores as part of the credit education process. Contact us today if you have questions about your credit report and credit score. Schedule a FREE consultation with a Senior Credit Consultant today. You can do this by clicking the link BOOK NOW OR CALL 866-373-1377.