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National Average Credit Score
Let's face it, many of us are just plain
competitive and some of us are curious. Then there are those that are worried
about qualifying for a loan. So what do these groups have in common when it
comes to credit scores? They all want to know how they compare to the national
average credit score.
We're not going to hold you in suspense - the national average credit score is
692 (November 2009). That value is based
upon research conducted by Experian, one
of the three major credit reporting and
scoring agencies. In fact, Experian uses
the Fair Isaac Risk Model. You may be
familiar with what are called FICO
credit scores. FICO is the credit model
developed by Fair Isaac.
Credit Score Scales and Calculations
We've talked about credit scores in
depth, but some of the concepts
explained there are worth briefly
repeating. This explanation should help
you to better understand how you compare
to national average credit score.
Credit scores are on a scale from around
300 - 850, with 850 being the highest
credit score possible. To give you a
feel for the extremes, while the
national average credit score is 692,
only 13% of the nation's population has
scores above 800. At the other extreme,
roughly 15% of the population has a
credit score lower than 550. In general,
a good credit score is anything above
700.
So that gives you two data points to
think about. The national average credit
score is 692 and a good credit score is
anything above 700. Does that mean that
half of all Americans have a credit
score below the national average?
The short answer is No. In fact, 58% of
Americans have credit scores above 700.
The national average is only 692 because
the average is being pulled down by some
very low credit scores. Remember, we're
not talking about the median score (half
above and half below), we're talking
about an average score.
Factors Affecting Credit Scores
There are a total of five bits of
information that go into the calculation
of your FICO credit score. But there are
just two pieces of information that
account for 65% of your total score:
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Payment History (35% of credit score)
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Your payment history is determined
from your payment patterns to creditors
or lenders. Basically, this component of
the score is a reflection of how
frequently you pay your bills or loans
back on time.
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Outstanding Debt (30% of credit score)
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The second major factor is how much
debt you have outstanding. The more debt
you have outstanding, relative to what
creditors think you can financially
handle, the lower your credit score.
National Credit Score Facts
Now that you have a fundamental
understanding of credit scoring, here
are some of
the facts we have gathered from the
Experian National Score Index (November
2009). These credit score facts are
based on information compiled from a
large database of credit scores in the
United States. This means the term
national average credit score and
average US credit score can be used
interchangeably.
From the Experian database, we know the
following facts:
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Consumers in the state of Nevada have
the lowest average credit score in the
nation, with a score of 668. This is two
points lower than Texas, which has the
second lowest average in the US.
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Consumers in the state of Minnesota
have the highest average credit score in
the nation with a score of 721. That's
over 50 points higher than Nevada.
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There are 18 states plus the District
of Columbia that have an average credit
score below the national average.
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There are 32 states that have an
average credit score above the national
average.
Finally, to satisfy all of those that
have a need to understand how their
credit score stacks up against the
national average and their state, we've
put together the following credit score
tables:
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