Average Experian FICO Score Reaches Another New High
This just in: Americans are continuing to improve their credit. According to Experian’s 2019 Consumer Credit Review, the average FICO credit score now sits at 703. In addition to that being up two points from last year, it also marks a new record. More impressively, since 2010, the average has climbed 14 points.
Not only has the average FICO score notched above 700 but the majority (59%) of Americans now have a score above that threshold. Similarly 45% of adults have a FICO that is either “exceptional” or “very good” — which equates to scores over 740 — with another 21% retaining “good” scores above 670. At the same time the percentage of those with “very poor” scores below 579 has decreased five points since 2010, holding at 16% in 2019.
Zooming in from the U.S. as a whole, Experian also ranked each of the 50 states by credit. In doing so, it found that the citizens of Minnesota had the highest average scores for the eighth consecutive year. Their average of 733 easily topped neighbors South Dakota and North Dakota, which tied for second at 727. Vermont’s 726 and Wisconsin’s 725 rounded out the top five.
Meanwhile, on the opposite side of things, Mississippi was once again last with an average score of 667. Also nearing the bottom were Louisiana (677), Alabama (680), Texas (680), and South Carolina (681). On the bright side, each of those states with the exception of Texas saw their average increase by at least one point since 2018.
There are several reasons that can explain why the average American’s credit score keeps climbing. For one, the U.S. economy just enjoyed its first-ever recession-less decade and unemployment remains at a historic low. Similarly wages have continued to increase, also making it easier for adults to pay their bills and practice good credit habits. Of course the abundance of educational credit resources and free sites such as Credit Karma are likely also playing a role in helping consumers better understand their credit and, in turn, improve it.
Even if it’s not unexpected, it’s always encouraging to see the average credit score on the rise. Given how such scores can play a factor in mortgage, car loan, and other interest rates, it stands to reason that consumers are now saving more on these products. At the same time the amount of debt Americans are taking on continues to grow as well. This situation could be particularly tricky should the economy begin to slow and might also lead to some reversals of the credit score gains we’ve seen over the past 10 years. Hopefully that won’t be the case but it’s always worth a reminder that credit should be used responsibly — regardless of how high your scores are.