What is the Average Credit Score?
When it comes to credit scoring, or any scoring for that matter, people always want to know where they stand. After all, if you can’t compare yourself to others, how can you tell if you’re good or bad, right?
That brings us to the age old question, which will forever be disputed, “what is the average credit score?” Keep in mind I’m referring to credit scores in the United States.
Once again, it’s a loaded question, because it depends which credit bureau is providing the data. There’s not just one credit score out there folks; there are different credit scores used for different purposes (e.g. home loan, auto lease), and also different scoring models, developed by different companies.
Recently, the three major credit bureaus, Experian, Equifax, and TransUnion, joined forces to create “VantageScore.” And of course Fair Isaac still has its popular Fico score kicking around. There are also Fico scores based upon data from Equifax and TransUnion.
Back to that “average credit score.” It’s not really the “average” because this type of data is usually only calculated as a median, meaning the middle number in a certain distribution. In other words, half of U.S. consumers have a score below the median, and half above the median.
An average, on the other hand, would take the sum of all credit scores and divide them by the number of people to come up with an “average credit score.”
So if Bob had a credit score of 750, Sue a score of 680, and Joe a score of 700, the average score would be 710, while the median would be 700.
That said, Fair Isaac, the creator of the Fico score, says that the average credit score (median) is 713, based solely on Equifax data from April – October 2008 (it didn’t change during that entire period). And because most credit scores stay within a 20 point range, that average score is likely to remain unchanged unless the scoring model changes dramatically.
The average VantageScore is 736, according to Experian. They actually use the word average. This credit score has yet to become widely used, so it’s of less importance, at least for now.
However, it’s calculated in much the same way as the Fico score, with payment history and credit utilization the most heavily weighted factors. So you can practice the same smart credit habits and score well with both credit scores, and any others out there.
So that’s the most recent data on credit score averages. I suppose this gives you a number to aim for, though no one really wants to be average, do they? (What is a good credit score?) Also be sure to check out my credit score range for more on where you stand and why it’s important.