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The average FICO® Score☉ in the U.S. rose to 714 in 2021, according to Experian data from September 2021. It's the fourth consecutive year of an increase, up from the average FICO® Score of 710 in September 2020.
Although 2020 was a historic year for the U.S. economy and beyond, 2021 may have been an even more tumultuous year for both the economy and the consumers who drive it. According to initial data from the U.S. Department of Commerce, the economy ended 2021 growing at a 6.9% annual rate. As always, consumer spending was a huge part of that increase. In addition, Bureau of Labor Statistics data shows inflation is higher than it's been since the 1980s, as goods and services cost consumers 7% more in 2021.
Both years included the beginning and ending of many relief programs. In 2020, expanded unemployment benefits swelled bank accounts and allowed many consumers to stay current on their loan and credit card payments, while millions of homeowners took advantage of COVID-related mortgage forbearance programs.
These federal relief programs helped borrowers stay current on their other debt obligations, which likely helped increase the average credit score. But in 2021, after many of these programs ended, credit scores remained high. Experian explored current consumer credit and debt data to understand how and why average scores have continued to increase.
Average Credit Score in the U.S. Reaches a Record High—Again
Nationwide, the average FICO® Score increased by four points to 714, the fourth consecutive year of an increase. A credit score of 700 or more is generally considered good.
The Average FICO® Score Increased Among All Generations
Scores increased in all age groups. And for the first time, the average FICO® Score of Generation X (ages 41 through 56 in 2021) is in the 700s.
The average score of millennials and Generation X both increased seven points from 2020 to 2021. The youngest consumers in Generation Z increased scores by five points, and the average score of baby boomers increased four points. The silent generation—the cohort with the best average credit score—increased two points.
|Average FICO® Score by Generation|
|Silent generation (76+)||758||760|
|Baby boomers (57-75)||736||740|
|Generation X (41-56)||698||705|
|Generation Z (18-24)||674||679|
Source: Experian (ages as of 2021)
Credit Card Utilization Remains Virtually Unchanged; Delinquency Rates Remain Low
Credit usage, or credit utilization, is the amount of revolving credit you're currently using divided by the total credit that's available to you. In 2021, the average credit card utilization ratio was 25.3%, virtually unchanged from 2020's rate of 25.2%. Currently, major banks show no signs of tightening standards on credit card loans, according to the Federal Reserve, and consumer spending remains strong despite consumer pessimism about the economy.
|Average Overall Credit Utilization Ratio|
Similarly, consumers do not appear to be falling behind on credit card payments at a greater rate. Nationwide, 1.67% of all credit card accounts are in some stage of delinquency, down from 1.82% in 2020. (Delinquency is defined as a credit card or revolving credit account with payments that have been past due for 30 days or more.)
|Percent of Credit Card Accounts Considered Delinquent|
Average FICO® Scores Increased Across All States
FICO® Score averages increased by at least two points in all 50 states and Washington, D.C. Maine, Mississippi and Nevada experienced the largest increases, with the average credit score in each state growing by six points. Minnesota remains the state with the highest average credit score of 742, a three-point improvement since 2020. Vermont has the second-highest average at 736, and Wisconsin is third with a 735 average credit score.
Despite various financial headwinds faced by consumers during the pandemic, the average credit score increased in both 2020 and 2021. Clearly, many consumers found a way to continue making their payments on time—potentially by increasing income, using stimulus payments or by taking advantage of loan deferment programs for mortgages and student loans, which can be a large part of the household budget.
Other typical catalysts for increases in delinquencies, such as the loss of income and home price depreciation many experienced during the Great Recession, didn't occur. Indeed, 2021 was marked by unusually large home price increases and significant labor shortages in many industries that contributed to wage growth.
|Average FICO® Score by State|
|State||Average Credit Score, 2020||Average Credit Score, 2021|
|District of Columbia||713||717|
How to Improve Your Credit Score
Improving your FICO® Score can be helpful before applying for a new line of credit such as a credit card, mortgage or personal loan. A higher score can help you secure better terms and lower interest rates available. Here are some actions that can help improve your FICO® Score:
- Pay all of your bills on time. This will help ensure your payment history remains unblemished and shows lenders that you have a history of managing credit responsibly.
- Pay down credit card balances. Keeping balances on your credit cards low will help keep your credit utilization ratio at a good level.
- Apply for credit only when you really need it. Credit applications typically result in a hard inquiry being added to your credit report. These can have a short-lived negative effect on your credit score, and their effect can compound if you submit frequent credit applications. Taking on a lot of new credit also reduces your average age of credit accounts, which can impact your score.
Understanding your credit profile can help you understand what lenders see when they look at your credit report. Getting your free credit score and report from Experian can show you where you are and what steps you may be able to take to improve your score.