Most people have great credit scores

by John Ulzheimer

Credit scores have been commonly used by consumer lenders for almost 3 decades now. They’re used for mortgage loans, credit cards, auto loans, student loans and everything else in between. It’s smart personal finance practice for consumers to work hard to earn and maintain solid credit scores. And, based on new data, it appears they’re doing just that.

In January 2018 Experian released their 2017 “State of Credit” survey, which indicates that consumers are scoring the best they have since 2012.  And in June 2018, VantageScore Solutions released credit score data on more than 12.5 million U.S. consumers which indicates that an enormous percentage of those consumers have elite credit scores.

According to the Experian data, the average credit score nationwide is now 675 and Minnesota residents have the highest average score at 709 (one of 4 states with average scores at or above 700[1]). According to the VantageScore data, 21% of mainstream consumers have scores above 800 and 55% have scores above 700.[2]   

While these impressive statistics might seem surprising, they actually are not. The average credit score has always been in the neighborhood of 700 and the percentage of consumers who have the truly elite credit scores (above 760) has consistently been above 35%. On the other hand, the percentage of consumers who have credit scores at or below 600 is an equally surprising 20%, according to the VantageScore data.

What Does This Mean?

Credit scores only consider the information on your credit reports, nothing more and nothing less. Good credit scores mean clean credit reports; whereas, poor credit scores mean damaging information on your credit reports. What these studies indicate is that most consumers maintain decent credit reports.

With a little more than half of the U.S. mainstream population scoring above 700, the doors of opportunity for economic investment are open to many. Generally speaking, a credit score above 760 earns the lowest interest rate on a mortgage loan. And credit scores at or above 720 get the lowest interest rates on auto loans. And although most people certainly can get a credit card with almost any credit score, the most attractive deals are reserved for consumers who have scores well into the 700s.

The good news is that studies have shown that once people experience a good credit score, they tend to keep their good score, unless they experience some sort of life altering event (e.g., loss of job or a divorce).

For those who have a credit score lower than 700, fear not. There is still opportunity on the road ahead, but often it comes at a steeper cost (i.e., interest rate). Which is why it’s important to continue paying your bills on time and avoid derogatory credit entries to build and sustain a solid credit score.

Also know that it’s certainly not the only factor in determining a score. For example, in the VantageScore credit scoring system, your “Payment History” represents about 40% of your total credit score. And while 40% sounds like a lot, it also means that 60% of your credit score has nothing to do with whether or not you pay your bills on time.

For more information on how to improve a credit score, visit:

1 Based on the VantageScore 3.0 scoring platform.

Based on the VantageScore 4.0 scoring platform.

Disclaimer: The views and opinions expressed in this article are those of the author, John Ulzheimer, and do not necessarily reflect the official policy or position of VantageScore Solutions, LLC.

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