The average American credit score is getting stronger, according to CNBC. In fact, the average score hit a record in 2018: 704. Congratulations, America!

To measure creditworthiness, the most widely used score in the country is FICO (named for its creator, Fair Isaac & Company, in 1956). The game played here is called “predictive analytics,” which uses your credit information to analyze and predict how you would handle more credit and responsibility. Somebody with a poor FICO score may not be approved for further credit opportunities. The assumption could be that the person isn’t responsible with money and credit, and may not pay their bills on time.

FICO scores officially range from 300 (poor) to 850 (excellent). Anything above 750 is considered excellent (but good is still good).

Here is the official call:

750+                         Excellent credit

700-749                    Good credit

650-699                    Fair credit

600-649                    Poor credit

600 or lower            Bad credit

The major difference in scores: age groups. The study found that there is a 91-point difference between the average scores of those in the oldest group of consumers and those in the younger groups. With each decade of aging, the average score increases by about 20 points.

Here are the average scores by age group:

The Silent Generation (before 1946)              729

Baby Boomers (1947-1966)                             703

Gen X (1967-1981)                                            658

Gen Y (1982-1995)                                            638

Gen Z (after 1996)                                            634

However, don’t be quick to blame young people for poor scores. The FICO score calculation does not consider age. In fact, 15 percent of the score is calculated from the length of credit history (obviously, young people have less history), and 10 percent of the score is based on the debt mix. The rest of the score depends on your time-payment history and how much of your credit you are using (credit utilization).

The state with the highest credit score: Minnesota (709). The state with the lowest: Mississippi (647).

The largest concentration of people in a credit score distribution fall into the two top groups: 750-799 and 800-850.  29.7% of the population has a credit score above 750.

CNBC reports that average credit scores bottomed out at 686 during the housing crisis of a decade ago. Much of that was due to the sharp increase in foreclosures.

Major reasons for the rising tide could be due to new standards for public records, which eliminated all civil judgments and tax liens from credit reports.

CNBC adds, however, that as credit card accounts increase, the majority of new cardholders are considered subprime borrowers. That means they most likely have a credit score of 660 or below.

 

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