Average Credit Scores !!LINK!!
Credit scores are required for most loans purchased or securitized by Fannie Mae. The classic FICO credit score is produced from software developed by Fair Isaac Corporation and is available from the three major credit repositories. Fannie Mae requires the following versions of the classic FICO score for both DU and manually underwritten mortgage loans:
average credit scores
Credit scores are not an integral part of DU's risk assessment because DU performs its own analysis of the credit report data. However, lenders must request credit scores for each borrower from each of the three credit repositories when they order the three in-file merged credit report, described in B3-5.2-01, Requirements for Credit Reports. If one or two of the credit repositories do not contain any credit information for the borrowers who have traditional credit, the credit report is still acceptable as long as
Loan Delivery collects credit score data for each borrower and also at the loan level. Lenders are required to deliver the representative credit score for all loans. This applies even if the average median credit score is used for loan eligibility and may result in delivery of loans with representative scores less than 620. For additional information, see the Loan Delivery Job Aid: Credit Scores.
According to FICO data from April 2021, 31 states and Washington, D.C., had average credit scores that ranked higher than the national average of 716.3 The same data found states in the Midwest and New England generally had the highest average credit scores.
Average credit scores tend to vary by age, state, and income, yet none of these factors are used to help calculate your credit score. Age and income, however, can indirectly affect your ability to satisfy the five factors used to determine your credit score. Meanwhile, demographic information like education level and average income can impact average credit scores from state to state. All things considered, with good financial practices, anyone can build an excellent credit score, regardless of their age, salary, or where they live.
If there are two or more borrowers on a loan, the lowest median score among all clients on the mortgage is generally considered the qualifying score. The exception to this is a conventional mortgage with multiple clients being backed by Fannie Mae. In that case, they average the median scores of the borrowers on the loan.
If you have a median score of 580 and your co-borrower has a 720 credit score, the average credit score would be 650. Because the minimum qualifying score for conventional loans is 620, this can mean the difference between qualifying for a mortgage and not.
According to Experian, at 742, Minnesota had the highest average FICO score in 2021. It was followed closely by Vermont, Wisconsin, New Hampshire, Washington, and North Dakota."}},"@type": "Question","name": "What Is the Average Credit Score in the United States?","acceptedAnswer": "@type": "Answer","text": "In 2021, the average FICO Score in the U.S. was 714, according to Experian. This was up four points from the year prior and the fourth consecutive year of growth.","@type": "Question","name": "What Is a Good Credit Score?","acceptedAnswer": "@type": "Answer","text": "A "Good" FICO Score is considered anything between 739 and 670. The four other FICO Score ranges are:Exceptional: 850 to 800Very Good: 799 to 740Fair: 669 to 580Very Poor: 579 to 300"]}]}] Investing Stocks
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Credit scores are determined based on a number of factors. Your FICO Score is primarily based on specific, weighted criteria including payment history (35%), outstanding debt (30%), credit history length (15%), pursuit of new credit (10%) and the types of credit you use (10%).
The average credit score in the U.S. stands at 703 as of the second quarter of 2019, but this is not the same for everyone. For instance, Louisiana has the lowest average credit score of 685 in the U.S., while Minnesota has the highest average at 739.
Your age can also indirectly play a role in your score. While age itself is not a factor used in credit scoring reports, the age of your accounts is. The older you are, the older your accounts are and the higher your credit score is, mostly due to your extensive payment history. As people reach retirement age, they generally have less debt, which can improve credit scores.
Between 56 and 74, consumers are more likely to have an increased income. This can help them pay off a significant amount of debt and contribute to an increase in their score. Conversely, they may have also already paid off most of their debt and have lowered their credit utilization ratio, which has a significant impact on credit scores next to payment history.
As you age and increase your payment history, increasing your credit score should be part of your goals. While you can do many things to speed up the process and have a better credit score, a good credit score keeps up with the national average. In your 20s and 30s, a good credit score is between 663 and 671, while in your 40s and 50s, a good score is around 682. To get the best interest rates, terms and offers, aim for a credit score in the 700s.
The average FICO credit score for those in their 20s is 660. Between the ages of 20 and 29, consumers are starting to build their scores. These consumers may have a low-limit student credit card and are making payments towards their student loans. A low income, short payment history and higher utilization could be why their average score is on the lower side of the credit score spectrum.
Consumers' average FICO Scores improve by 11 points in their 40s and reach an average of 689 by age 49. Around this age, consumers may be co-signing student loans with their children and looking at refinancing options, such as debt consolidation, to reduce debt and prepare for retirement.
Credit scores continue to climb, and at a higher rate, throughout the consumers' 50s. During this time, credit scores increase by 24 points from age 50 to 59. Consumers in their 50s are at their peak earning years and focusing more on retirement. They may be paying off any leftover debt to eliminate payments before retiring from their jobs.
Once consumers hit their 70s, their average FICO scores will slowly plateau, getting closer to the perfect 850. Around this age, the Equal Credit Opportunity Act (ECOA) permits credit scoring models to favor certain age groups, specifically those over the age of 62. However, this age group is also likely to use credit less to avoid gaining more debt since they are now living off of Social Security, pensions and their retirement savings.
Young people often experience far lower credit scores compared to their older counterparts due to the lack of a significant credit and payment history. As those in their 50s and 60s have had their accounts for longer, credit bureaus have gathered enough activity to give them a more accurate credit score that reflects their credit-worthiness.
Each year, we share the average U.S. FICO Score, which now stands at 716. This is eight points higher than it was one year ago, and five points higher than the last time we reported on the average FICO Score in October 2020. At that time, the news that the FICO Score had trended up in the early months of the COVID-19 pandemic was greeted with some surprise. But there is considerably less surprise about these latest results: the data shows that a growing economy, accompanied by historic home price appreciation, strong performance of equity markets, and evidence that the payment accommodation programs offered by lenders since the onset of the pandemic have helped (and are continuing to help) affected borrowers bridge the gap that opened up in their finances as a result of COVID-related income loss. 041b061a72