The average FICO® Score* in the U.S. as of April 2018 is 704, according to data analytics company FICO®. That's the highest average FICO® Score since 2005. Many adults know their FICO® Scores, but not everyone understands how they compare against other Americans.
The FICO® Score, which ranges between 300 and 850, is the most commonly-used credit scoring model by lenders for evaluating a borrower's creditworthiness. A FICO® Score of 704 is considered "good" by most lending standards. Approximately 29% of Americans had a FICO® Score that fell in the "good" credit score range in 2018, while approximately 58% had a FICO® Score of 704 or greater.
- Someone with a FICO® Score of 800 or above is considered to have "exceptional" credit.
- People with scores ranging from 740-799 fall into the "very good" credit range.
- Scores between 670-739 are considered "good" scores.
- A "fair" score falls between 580-669.
- Any score that is lower than 579 is considered a "poor" score.
What Is the Average Credit Score by Age Group?
The average FICO® Score generally varies depending on the age group. As of April 2017, the average FICO® Score in each age group increased by four to five points, on average, since last year. According to recent FICO® research, in 2018 people over age 60 had the highest average FICO® Score of 747, a five-point increase since the same time last year.
Americans between the ages of 50 and 59 hold the second-highest FICO® Score average of 713. People between the ages of 40 and 49 have an average FICO® Score of 690, while Americans between the ages of 30 and 39 score 677 on average. The average FICO® Score for Americans between the ages of 18 and 29 is 659.
How Are Credit Scores Calculated?
FICO® Scores are calculated by evaluating the data in your credit file to determine how likely it is you will pay back your credit obligations. FICO® Scores consider major factors like your payment history, credit utilization, and age of credit history, among other criteria, in order to produce a number that reflects your creditworthiness.
FICO® Scores are based on five types of information found in your credit report:
- Payment History: Payment history is the most important aspect of your credit report and shows whether you have paid your credit accounts on time.
- Amounts Owed: How much debt you have is is the second most important category, including the evaluation of how much of your available revolving credit you are using each month.
- Length of Credit History: The length of your credit history is based on how long you have had credit accounts open. A more established credit history usually equates to lower risk.
- Recent Activity: This category looks at how many "inquiries" you have, how many times you have applied for credit in the past 12 months.
- Credit Mix: Your credit mix is based on how many different types of credit accounts you have, including mortgages, credit cards, auto loans, and installment loans.
Though these are the five factors used in determining a FICO® Score, it is important to remember that lenders often look at everything in a credit report along with other information on your credit application, such as your current debt-to-income ratio for example.
What Is Considered a Good Credit Score?
A credit score higher than 670 in the 300-850 scoring range is generally considered "good." A credit score of 800 or above on the same range is considered to be "exceptional." Higher scores generally indicate that you have made better credit decisions, thus making lenders more confident that you are likely to repay your future debts on time.
More Americans are Scoring Higher
The average FICO® Score has increased over time as the number of Americans with exceptional scores have grown. In 2018, more than 21% of Americans were considered to have an exceptional FICO® Score, an increase of 5.6 percentage points from the average in 2005.
Meanwhile, the percent of Americans with average FICO® Scores below 550 has decreased 4 percentage points compared with 2005. Only 11% of the U.S. population in 2018 has a FICO® Score that is less than 550.
How Do You Improve Your Credit Scores?
Improving your FICO® Score can be very helpful before applying for a new line of credit like a credit card, mortgage, or personal loan, because a higher score can help you secure the best terms and interest rates available. Here are some actions that can help improve your FICO® Score over time:
- Making sure you pay all of your bills on time. This will help ensure your payment history is unblemished and shows lenders that you have a history of paying on time.
- Keeping balances on your credit cards low will help keep your utilization at a good level.
- Limiting your applications for new credit to only when you really need it.
Know your financial profile to understand what lenders see when they look at your credit report so you can make sure to get the best interest rates and terms.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on October 16, 2018, and has been updated.
*Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.