The average credit score in America has climbed to an impressive 715 as of 2024, according to Experian. This marks a notable rise from 703 in 2019. Interestingly, this improvement coincided with the global pandemic, a time when Americans not only boosted their credit scores but also their savings rates, which spiked to 32% in 2020 before settling back to around 5% in 2023.
Breaking it down by age groups as of March 2024, the data reveals a clear trend: credit scores increase with age. Gen Z adults score around 665, millennials are at 687, Generation X hits 710, baby boomers reach 746, and the Silent Generation tops the chart with 750. This pattern isn’t surprising since building a good credit score takes time and consistent financial behavior.
Despite the rise in average scores, lending standards remain stringent. A few years ago, a loan officer told me that he hadn’t dealt with anyone who had a credit score under 800 in over two years. This high bar continues today, driven by strong demand for loans. Potential borrowers must have excellent financial health to secure the best rates.
Understanding credit scores is vital. They range from 300 to 850, with higher scores reflecting better creditworthiness. If your score is below 580, chances are you’ll struggle to secure credit due to past financial missteps. A score of 700 or more is preferred by lenders, with today’s ‘good’ threshold apparently around 740, up from the past standard of 720.
Here’s what factors into your credit score:
– Payment history on loans and credit cards, including the frequency and severity of late payments.
– Credit utilization rate.
– The type, number, and age of credit accounts.
– Total debt.
– Public records, such as bankruptcy filings.
– New credit accounts opened and the number of inquiries into your credit report.
Payment history, total debt, and the length of credit history are crucial. Interestingly, factors like race, religion, national origin, sex, marital status, salary, occupation, or residence location are not considered in credit scoring.
The average credit score has seen a modest increase from 686 in 2009 to 710 recently. While it’s a small rise, it reflects an overall improvement in American financial health.
Looking at credit scores by state, the highest averages are found in places like Washington, Oregon, and Minnesota (720), suggesting regional differences in financial health. The trend of higher scores continues in mortgage lending, with most new loans going to borrowers with scores of 720 or above.
This landscape suggests a robust lending environment and a financially healthier public, despite the rigorous standards set by lenders. Whether purchasing a home or managing personal finances, understanding and improving your credit score remains a key strategy in navigating today’s economic climate.
