You Won’t Believe How High the Average American’s Credit Score Is

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The average credit score has increased quite a bit since 2010. Find out the average American’s credit score and see what you can do to improve yours. 

Your credit score is an important number. It affects the credit cards you can get, interest rates on loans, and even if you get approved to rent a home. If you’re wondering how your credit score stacks up compared to the national average, here’s the latest data.

Here’s the average American’s credit score

The average American’s credit score is 714 as of 2022, according to Experian. That’s the average under the FICO® Score system, the one that’s most widely used by lenders.

Credit scores range from 300 to 850. Scores between 670 and 739 fall into the “good credit” range. While a score of 714 isn’t in the highest possible range, it’s an impressive score, especially considering it’s the national average. With that kind of score, you could likely get approved for many of the best credit cards and secure low interest rates on loans.

Although the average credit score didn’t change from 2021 to 2022, it has been trending upward over the years. The average score was 689 in 2010. For the most part, it has been steadily increasing since then.

Factors that affect your credit score

Your FICO® Score consists of five factors. Here are those factors and how much they impact your credit score:

Payment history (35%): Your history of paying bills on time or late (but only payments that are at least 30 days past due can be reported as late on your credit file).Amounts owed (30%): The amount of money you owe on your credit accounts. What’s most important here is your credit utilization ratio, which is your credit card balances compared to your credit limits.Length of credit history (15%): The length of time you’ve been using credit, including the age of your oldest account, newest account, and your average account age.Credit mix (10%): The types of credit accounts you have. It’s better for your credit score to have multiple types of accounts, such as credit cards and installment loans, instead of just one.New credit (10%): Your number of new credit applications. These have a small impact individually, but that impact can add up if you apply for many new accounts in a short amount of time.

How to improve your credit score

There are lots of potential benefits to having a higher credit score. For example, the best credit cards offer much higher rewards rates, meaning you can earn more cash back or travel points with them. But to qualify for cards like that, you typically need a high credit score.

While nobody needs a perfect 850 credit score, it’s good to build and maintain a score in the mid-700s. A score of about 760 is generally high enough to qualify for anything you need, including the lowest mortgage rates. If your score isn’t there yet, here’s what you can do to improve your credit:

Always pay your bills on time. Specifically, it’s credit cards and loans that get reported on your credit file, meaning each on-time payment helps your credit score.Use less than 30% of your credit limit. For example, if your card has a $10,000 credit limit, keep the balance under $3,000 at all times. This is good for your credit utilization.Don’t apply for new accounts too often. It’s fine to do this when you need a new credit card or loan, but be selective while you’re building your credit. New account applications have a small impact on your credit score, and if you’re approved for an account, it also lowers your average credit history.

Building credit mainly depends on following a few easy financial habits with your credit cards and loans. Based on the average credit score, it looks as if many Americans are doing this, which is a good sign for the country’s financial health.

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