Average Credit Scores

What are average credit scores? This is a question which is often asked by consumers. Unfortunately, there are no easy answers. In its publication, “Understanding Your FICO Score,” Fair Isaac, the creator of credit scoring and the provider of credit scores to the three main credit bureaus, states that the average score varying by lender and industry. The inventor of credit scores says that there is no such thing as average scores. However, the myth persists and people in the lending business and others continue to speak of average credit scores.

Credit scores, commonly referred to as FICO scores, range from 300 to 900 points. Creditors use the scores as a snapshot of an applicant’s creditworthiness at any given moment in time. Generally, people with ratings below 620 will have a difficult time getting credit and if they are able to secure credit, they will receive the least favorable terms and conditions.

At the other end, people with credit scores at 700 or higher can expect to receive competitive terms and conditions and are in a position to negotiate terms and conditions which those with scores below 620 can only dream about.

In an article in the March 26, 2007 edition of Newsweek Magazine titled “Buying With Bad Credit,” Jennifer Orodonez noted that “Americans whose credit score is between 500 and 599 (read: not so good) and who not long ago might have qualified” for some types of loans are in the present economic downturn almost certain not to be able to secure credit.

One Internet source states that credit scores between 620 and 650 are average credit scores and that lenders will most likely scrutinize those individuals but still extend credit to them, though not on the best terms and conditions.

Experian on its website states that the average credit score for Americans is 693. Thus, a good score seems to be between 620 and 693 and an excellent score is 700 or above.

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