The United States national credit score average has suffered in the last couple of years due to the unfortunate rise in unemployment, foreclosure, and bankruptcy. More and more people must borrow in these economic times just to get by, and sometimes the fees just add up and negatively impact credit scores. Some states seem relatively unaffected while others are suffering from extremely low average scores.
National Average Credit Score
The national credit score is currently somewhere around 680 – which isn’t that terrible! Even though more and more Americans are facing record amounts of debt, all credit is built on debt and it’s a necessary part of the system. Apparently, as a country we have been able to manage our huge debt in a fairly efficient manner judging by the fair average score. Even if you are above this average, it may be beneficial to keep building your score so that you can save big on interest rates every time you borrow.
By Age
Average credit scores show a trend of increasing as the age bracket increases. Of course, it takes time and effort to build a credit score so this makes perfect sense. Typically, younger citizens haven’t had the chance to build a credit rating with solid history. One of the biggest factors that determine your credit score happens to be credit history. The average credit score for those over the age of 55 is close to 720, while people under the age of 24 are more likely to see credit scores at around 640. That’s how big of a difference length of credit history makes.
By State
Arizona, Texas, and Nevada all have the lowest average credit scores in the nation, with the average scores being under 660. This may be due to the sub-prime mortgage loan crisis during which many people were offered loans at exorbitantly high interest rates, in a lot of cases with hidden fees that made the loans impossible to repay. While land values and hundreds of other factors also play a part, now is just not the best time for credit-builders in those states.
On the other hand, Minnesota and the Dakotas have overall average credit scores at around 720. This number is the standard entry point for being considered low-risk. People in these states will often pay lower interest rates and have better chances of taking out loans. This can be attributed to a number of factors including the low cost of land and living. The less it costs to live the more you can count on being able to pay back debt.
Why know your Credit Score?
It’s obviously great to know the national credit score average and how you compare to others of your age group and state, but the real important factor is your personal credit score. If you wait until you realize how high your interest rates are climbing or until you’ve actually been denied for a loan, then you have waited too long. Credit reports are easy to obtain online allowing you to stay up to date as well as to help you keep on the lookout for potentially devastating identity theft. Always know what your credit score is and keep it in good health using by learning how to raise your credit score.
