The Credit Solution

Knowing the credit situation in the United States will help you better understand credit scores and where you belong on the spectrum. Before we go further to talk about credit scores across states and regions in the United States, it is important to let you know that you can request your free annual credit report today by contacting us. Your financial annual credit report will help you understand what is being reported, file a dispute if you believe any information is inaccurate, and discover issues of fraud or theft on your account.

Thankfully, we have helped a lot of people with problems like this, and we can help you resolve your credit problems at iconiccreditservices. You will learn about the average credit score in the United States, the regions with the best FICO® credit ratings, why experts present the data this way, and a peek into all the components and scale of credit scores in the US. We will talk about the demography of credit scores and why you need to maintain a good credit score all along.

Credit rating

Having no credit at all is not worse than having bad credit. In both cases, lending institutions will be less likely to work with you because they are unsure about your ability to pay back a loan. If you haven’t believed in credit all this while, you may want to seek the services of a consignor by contacting us at iconiccreditservices for more information. If you have bad credit, we can help you work to improve that as well. It is important to note that using credit will give you access to a lot more than you can get from living off on your monthly income.

Credit scores are aggregated measures of an individual or organization’s ability to pay off debts. They have become the standard used by lending institutions to assess whether an individual or a group is creditworthy. You will understand more about credit scores by reading credit scores explained published earlier on our website.

The US Average

The United State’s Average credit score shows the nationwide level of creditworthiness calculated based on the data available from state bureaus and credit institutions in the United States. The closet to what you will find in public data results is the sum of the average of each 50 states in the US divided by the number of states. Doing this gives an inclusive picture of the credit situation in the country.

Reports published by valuepengiun puts the figure for average credit score in the United States at 695 for FICO®, and 673 for the Vantage Score. Experian, on the other hand, gives a FICO® score of 703 using data from the second quarter of 2019. According to this data, 21% of Americans had a FICO® score that qualifies as good going by most rating standards, while 58% could be touching the very good or exceptional line. More Americans are maintaining an awesome credit reputation, with 20% having an exceptional FICO® score. The number of persons with a poor credit score is also reducing with a record 1% decrease in Q2 of 2019.

On the seven-year chart, the average FICO® score in the United States has been increasing steadily, except for a sharp 2 points drop from 693 in 2012, to 691 in 2013. The steepest point on the curve was between 2015 and 2016 when the average FICO® score soared 4 points from 695 to 699. Experian says the two critical factors for this are a reduction in late payment of bills beyond 30 days, and a significant reduction in the use of credit cards.

 States and their Averages

The Southern states of Mississippi, Arkansas, Louisiana, and Alabama have always fared badly in terms of the ability to pay creditors. Some individuals in these states may constitute the credit invisible population in the country who have no credit scores. The reason for lower credit scores in the southern parts of the United States is as a result of a range of factors like lower pay, less satiable job markets, lower use and access to banks, and lower education levels.

The state of Minnesota has the highest FICO® score in the past 8 years. Experts say the reason for this is a low ratio of delinquent credit accounts with a little above 10% of such consumers in the state. The average FICO® score in 84% of states in the US increased in 2019 from their recorded scores the previous year. Minnesota which comes first on the list with a score of 733 is followed by South Dakota, North Dakota, Vermont, and the state of Wisconsin. 

Metro Areas

There are 392 Metropolitan areas in the United States, and the data didn’t leave them out of our analysis. 305 metro areas saw an increase in their FICO® score in 2019. Of these areas, the Boulder, Colorado metro area recorded the highest FICO® score of 743 straight from 703 points in 2018. The top 5 metro areas by FICO® score following Boulder, Colorado are Rochester, Minnesota, Bismarck, North Dakota, Corvallis, Oregon and Wisconsin, Madison. Also, 235 metro areas scored 7 points or higher than they had in the previous year placing them on a 700-point score and above.

Income and Credit Score

While it is important to note that the debt to income ratio has no direct effect on the credit score. Statistics reveal some relationship between the income and overall credit score of individuals. Since lending institutions limit the amount of credit they issue to people with low income, these persons are at higher risk of using more than 30% of their available credit balance. Reports from the Minneapolis Federal Reserve published by vintagepengiun shows that individuals in families earning less than 50% of median family income had a lower credit score. Their score was 664 and below compared to those who earned 120% of the median family income who had a 775-point credit score on average.

Age and Credit Scores

It is interesting to observe how age affects the credit score. Certain credit behaviors are associated with a certain age range in a population. The summary of this data shows that credit score increases with age, except in a data published vintagepengiun which shows lower credit scores for people in their 30s. For these age groups, it is a point in their lives when major expenses such as marriage, family, and mortgage start to rise. Baby boomers and people from the silent generation maintained higher FICO® scores than younger generations. There are a lot of psychological explanations for this, including the tendency to be shrewder.

Rounding up

Now that you know the United States average credit score, you will be able to determine how you measure up with other Americans. Opening several credit cards could expose you to the risk of missing multiple payment deadlines. We can see that Americans are maintaining healthier credit habits with rising FICO® scores and fewer cases of delinquents. As stated earlier in this article, maintaining a good credit score can open a whole new world for you by giving you access nearly all that you need to live your dream life without much stress. Make sure to keep track of your credit always, and if you need some help, do not hesitate to contact us at iconiccreditservices.

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