What Is The Average Credit Score By Age, State & Income?
It’s human of us to compare each other with others.
Whether it’s beauty, height, smarts, or physical characteristics, we all can’t help ourselves!
When it comes to our credit scores, it’s the same.
But whatever credit score you’re trying to achieve, it’s great to know what your credit score is compared to everyone else.
Lending companies to some extent probably lend money based on average credit scores of American people. It would make sense that they do.
Below, I want to share what the average credit score is by age:
Average Credit Score By Age
There are a few good places online that show the average credit score of Americans by age. I’d say one of the best ones is from valuepenguin.com. They have really nice charts and graphs that detail it, so I recommend giving them a look.
I’ll highlight their findings here though.
First, they break down the credit score rating as following:
- 720 or more: Excellent
- 660 – 719: Average/Fair
- 620 – 659: Poor
- 620 or lower: Bad
It’s not always like the above, but it gives you an idea of where credit scores are.
Here’s some interesting statistics from Valuepenguin:
From 2005 – 2015, Average credit score remained relatively unchanged
Subprime credit scores (credit scored below 620) remained relatively unchanged as well
Overall, the average credit score has a very slight small trend upwards.
Average credit score by age groups:
The main findings from ValuePenguin is that the average credit score improved with age. That’s not surprising because credit scores takes time to build, and younger can be a little more illiterate about building credit and perhaps are more focused on other things, like school and starting families.
However, the age group between 30-39 are the biggest group with subprime credit. That makes sense as well because in this age group, many people have very large expenses like purchasing a new home or paying for a wedding. Coupled with student loan debt and perhaps car loans, many people have a hard time maintaining a good credit score.
Average Credit Score By State
Governing.com has a really nice map of the average credit scores by state. It shows the states with red and green, with red being lower credit scores and green being higher scores.
The lower parts of the United States have more “red”, meaning lower credit scores, and the higher parts have higher credit scores. What’s interesting is the state of Nevada is very RED. Perhaps Las Vegas has something to do with that.
Average credit scores by state gives insight into the specific regions economic status. If the overall credit score rises or falls, it gives indication of the financial health of that specific region.
Average Credit Score By Income
You won’t be surprised to hear that people who make more money tend to have higher credit scores. A reasonable explanation for this is that people who make more money don’t need to take out loans as often, and can also maintain a lower credit utilization, which accounts for 30% of your credits core rating.
Also, the more income you have, the more credit you can borrow usually. And when you have a large amount of revolving credit (like credit cards or lines of credit), it increases your credit utilization rate, which will also help increase your credit score.
Overall, What Is The Average Credit Score?
what is the overall average credit score in the United States?
Credit scores will range by age, gender, income levels, and state.
But if you calculate a good sample of the United States, what would be the average overall credit score?
The answer is: It’s hard to say. You’ll get a different answer from each place you go. The problem is, credit scores are calculated differently depending on the credit bureaus, and it’s difficult to calculate the average credit score for all of America accurately (well it’s possible, but probably extremely expensive to do so).
Anyhow, below are some findings I’ve been able to find on the internet:
credit.com reports that as of 2nd quarter 2013, the average VantageScore (type of credit score) for people with an existing auto loan and lease was 761. And people with a bank card had an average score of 796, and those who have a mortgage it is 819. Also note that VantageScore calculated here is scaled from 501-990. They also found that as of October 2012, the average FICO score was 689.
The Street reports that the national average FICO score is 695, which is an all time high. They also noted that people with FICO scores above 800 has been increasing as well – which is great.
Another interesting statistic reported on fool.com is that more than 75% of Americans have a credit score below 700.
Summary Of Average Credit Score In America
From all the data above, it’s apparent that a FICO credit score of 650-700 puts you somewhere in the average range. Whether you are in the average range or not, it would be a good idea to learn how to increase your credit score (unless you are in the excellent credit range).
Increasing your credit score will get you lower interest rates. The following is taken directly from this article:
For example, according to myFico, a borrower with a credit score below 660 who is taking out a five-year loan of $20,000 to buy a new car would pay an annual interest rate of 10.385%, or $5,724 in interest over the life of the loan. If that same person had a credit score north of 720, the interest rate would be a paltry 3.245%, which works out to total interest payments of just $1,693.
The difference is enormous. Paying almost $6000 for a loan vs $2000 is a big deal. Increase your credit score is almost mandatory in my opinion. If you really want to take charge of your financial situation, a strong credit score is one of those things you MUST do.
How To Increase Your Credit Score Fast
If you’re interested in learning how to increase your credit score, check out this guide that shows you how to improve your credit score quickly in 7 steps.