Average Credit Scores - How Do You Compare
Below is a MRR and PLR article in category Master Series -> subcategory Personal Finance.
Average Credit Scores: How Do You Measure Up?
What’s the average U.S. credit score? It’s 690. How close was your guess? If you were off, don’t worry?"understanding credit scores involves a few key factors. You need to consider the state of the economy and understand the range of credit scores.
Economy and Credit Scores
A declining economy can negatively affect credit scores. So far, the economic downturn hasn’t severely impacted them, but it’s wise to take steps to maintain or improve your score anyway.
Understanding Credit Score Range
Credit scores range from a low of 300 to a perfect 850. Mathematically, you might expect the average to be 575, but the national average stands at 690. This discrepancy is largely due to people prioritizing bill payments, demonstrating resilience despite challenges.
Lender Requirements
Lenders often don’t disclose specific cutoff points for loan terms, and these criteria can change frequently. Years ago, a credit score of 680 might have secured favorable terms, but today, you often need a score of 720 or above to get the best rates. This increase is partly due to lenders adapting to economic conditions and heightened risk assessments.
State Variations in Credit Scores
Each state has its own average credit score. States like Iowa, Minnesota, New Hampshire, Massachusetts, Vermont, Montana, North Dakota, and South Dakota boast averages of 700 or higher. Conversely, states such as Louisiana, Texas, West Virginia, Georgia, Michigan, Alabama, North Carolina, Nevada, New Mexico, Alaska, and Arizona have averages between 660 and 670.
Maintaining an awareness of your credit score and understanding these factors can help you better navigate financial decisions.
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