What Is an Average Credit Score?

Your credit score: That little three-digit number that is a key determining factor in so many important decisions, purchases and investments. You hear all the time the necessity of having good credit and of the dangers of having bad credit. Financial experts, mortgage professionals and economists alike preach against the dangers of bad credit and how low scores can hinder your opportunities and leave you shackled with debts and other restrictive obligations.

So where is your credit score?

In the imperfect world in which we leave, not everyone is going to have a glowing credit report. Just as all people come in different size and shapes, with varying personalities, backgrounds and experiences, so, too, will people be saddled with credit scores all over the board.

Different credit scores and score ranges will qualify one for different levels of credit as well as various rates, terms and types of loans. For example, if you have diligently paid your installment loans, car payments and mortgage on time, and if you have kept credit card balances to a minimum, you likely have an excellent score in the range of 720 and above. This will enable you to receive favorable loan terms and qualify for higher amounts of credit.

What about an average credit score? The typical American has a FICO score somewhere in the neighborhood of 690, which, according to the Fair Isaac Corp. teeters on the edge of average and good credit. The same institution reports that average credit-on the FICO scale-lies somewhere between 630 and 689. These numbers are based on a range from 300 to 850.

Average credit is certainly nothing to be worried about, but an average score (particularly one on the lower end of the spectrum) does come with limitations, and it certainly would be advantageous to raise the score to the good or excellent level.

Average scores can also vary from state to state. For example, it appears as though the Southern states seem to produce lower scores among its residents. Meanwhile, Minnesota has the highest average credit score at around 718. Other states with high average scores are North Dakota, South Dakota, Vermont, New Hampshire, Massachusetts and Montana.

Be aware that there are definite levels within an average score. For instance, a person with a 635 score will have more going against him or her than a person with a 680 score. Though both are considered average, lenders will be more inclined to look at the score itself rather than the status of it being average, good, poor or excellent.

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