Credit score has an important place in many people’s lives. Because, in all transactions related to credit, we see credit points. For this reason, many people wonder about the average credit score. There may be two reasons for this; compare the credit score with other credit points or have a new credit score.
For the first time, people who have a credit score may wonder about the average credit score in order to understand how to manage the credit score. They want to know if the credit points that will occur in 6 months are less or more than the other credit points. Because they want to have an idea of what is likely to be accepted when applying for a loan.
People who have had a credit score for a long time also wonder about the average credit score. Because they want to understand how good they are at managing their loans. They then decide which steps to take to improve their credit score. Because the better the credit score, the greater the advantages.
According to which criteria is the average credit score determined?
To know how the average credit score is generated, you need to know the credit score ranges well. However, this is not very easy. Because there are different types of credit score and different credit score calculation systems. The average credit score is also shaped according to these criteria.
When credit score is mentioned, 3 credit reporting institutions come to mind. These credit reporting agencies are; Experian, Equifax and TransUnion. Each credit reporting institution generates credit points with the help of the credit reports they prepare. Therefore, each credit reporting institution has its own credit scoring system and credit score. For this reason, it is necessary to know the credit ranges of all credit reporting institutions to determine the average credit score.
Apart from the credit score ranges of the three credit reporting agencies, there is another element that determines the average credit score; credit score types. Even if the credit score types are similar, they are different from each other. The most popular and preferred credit score type by creditors or lenders is FICO. VantageScore is one of the most well-known credit score types. Usually VantageScore is higher than FICO score.
Based on this information, the average credit score ranges for the three credit reporting institutions and credit score types are as follows;
Average credit score ranges by FICO score;
- Excellent credit: 685-800
- Good credit: 635-685
- Fair credit: 550-635
- Poor credit: 465-550
- Bad credit: 465 below.
According to VantageScore, the average credit score ranges are;
- Excellent credit: 750+
- Good credit: 700-749
- Fair credit: 650-699
- Poor credit: 600-649
- Bad credit: below 600.
A good credit score or a fair credit score depends on how the lender evaluates you. Although these are the average credit score ranges, they are the lenders who will have the final say. When applying for a loan, you can apply by taking these average score ranges into consideration, but your application may be rejected even if your credit score matches the average credit score specified here. Therefore, it is better to make a decision by visiting the websites or collecting information about the lenders before applying to the lenders. The average credit score alone is not a sufficient indicator.