The credit industry continues to evolve, and the latest development is the migration from the traditional FICO score to what's called VantageScore. The scale of this score varies from FICO, so the numerical value of what's considered a good score has changed too.
In this article, we're going to review some of the recent changes to consumer credit scores. That discussion will start with the numerical scale now used by the three major credit rating agencies as well as the new grading scale. Then we'll talk about the factors that influence scores, which provides insights into improving them too. Finally, we'll finish up with some national and regional statistics for both averages as well as distributions of scores.
Nationwide Credit Score Scales and Calculations
VantageScore was developed by all three credit rating agencies, Experian, Equifax and TransUnion. By agreeing to use the same numerical scale and scoring mechanism, consumers should see more consistency and accuracy in their scores. The new VantageScore also allows for better scoring of "thin file" consumers, which are individuals with a limited credit history.
Numerical Scores and Grading Scale
Credit scores will now range from 501 to 990 under the VantageScore system. This is considerably higher than FICO scores, which ranged from 300 to 850. Consumers with higher scores are thought to have a lower risk of default and should be offered more attractive interest rates on loans.
To help differentiate between good and bad scores, VantageScores were also put on an academic scale, where:
Scores between 900 and 990 are considered an "A"
Scores between 800 and 899 are considered a "B"
Scores between 700 and 799 are considered a "C"
Scores between 600 and 699 are considered a "D", and
Scores below 599 are considered an "F"
Note: While the original VantageScore is still used by some companies, VantageScore 3.0 is on a scale that ranges from 300 to 850.
Score Distributions and National Average
Currently, the national average credit score is 718. That value is based on research conducted by Experian and is calculated using the VantageScore system. Creditors such as utilities, as well as lenders, may continue to use FICO scores calculated by Fair Isaac when evaluating a consumer's risk of default. Unfortunately, consumers rarely have access to these scores. All three agencies are now providing VantageScores to consumers when offering free credit scores or monitoring services.
Note: In line with the national average credit score, we created guides for those who are just below the average: Is a 710 credit score good? Most importantly, how can you improve it? How long until you can reach 800+?
The table below shows the distribution of credit scores by numerical value as well as grade. For example, the national average of 718 falls into the range of 700 to 799 (Note: The VantageScore 3.0 average is 673). Research indicates that 21% of the population falls into that range of scores, and 60% of the population would have a score of 700 or greater.
Credit Score Distribution
Score | Grade | Population | Cumulative |
900 - 990 | A | 14% | 14% |
800 - 899 | B | 25% | 39% |
700 - 799 | C | 21% | 60% |
600 - 699 | D | 20% | 80% |
550 - 599 | F | 10% | 90% |
501 - 549 | F | 9% | 99% |
Factors Affecting Credit Scores
There are a total of five factors that go into the calculation of a credit score, but three factors account for 81% of the total:
Recent Credit (30%): an indicator of recent checks into the consumer's credit which oftentimes means the consumer is applying for additional credit.
Payment History (28%): determined by repayment patterns to creditors or lenders. This component of the score is a reflection of how frequently bills or loans are paid on time.
Utilization (23%): how much debt is currently outstanding relative to what creditors believe the consumer can financially handle.
Additional information on this topic can be found in our in-depth article: About Credit Scores.
National Credit Score Facts
The following facts are based on information compiled from a large database of credit scores throughout the United States. As of September 2020, the average FICO score in the United States is around 700, while the median score is closer to 720. As a reminder, the median score is the midpoint in the data, meaning half of the scores are above this value and half are below. Since the average score is considerably lower than the median, it's reasonable to conclude there are a large number of very low scores (well below 630) that pull the average away from the median. The following tables provide average scores by state:
Credit Scores at or above the National Average
Massachusetts | 652 | Alaska | 640 |
Hawaii | 651 | Rhode Island | 639 |
Minnesota | 647 | Nebraska | 638 |
New Hampshire | 647 | Oregon | 638 |
Connecticut | 646 | Wisconsin | 638 |
Vermont | 645 | Iowa | 637 |
New Jersey | 644 | Utah | 637 |
North Dakota | 643 | Maine | 636 |
Washington | 643 | Idaho | 633 |
California | 642 | Kansas | 633 |
Colorado | 642 | Virginia | 633 |
Montana | 641 | Arizona | 632 |
New York | 641 | Illinois | 632 |
South Dakota | 641 | Pennsylvania | 632 |
Wyoming | 631 |
Credit Scores below the National Average
Florida | 629 | Indiana | 621 |
Nevada | 628 | North Carolina | 621 |
Michigan | 627 | Tennessee | 620 |
Delaware | 626 | Georgia | 618 |
Maryland | 625 | Kentucky | 618 |
Missouri | 625 | Louisiana | 616 |
New Mexico | 624 | South Carolina | 615 |
Ohio | 624 | Arkansas | 614 |
Oklahoma | 623 | Alabama | 613 |
Texas | 623 | Mississippi | 604 |
Note: Information for West Virginia is not reported.
About the Author - National Average Credit Score
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