The Average American's Credit Score Is Pretty Terrible
How does your credit stack up to other Americans? A new report indicates that the average credit score across the US is just 604 — pretty poor compared with what's needed for some of the best rewards cards. There are a few factors associated with your assigned score, such as payment history, but ultimately it seems that the average American's credit is in subprime territory.
The actual average varies quite a bit across different states and zip codes — wealthier areas like certain neighborhoods in the Bay Area, Seattle and New York have some of the highest average scores around the US (approaching the 850 cap), while less prosperous cities, like Detroit, end up at the bottom of the list. The highest average credit scores for states were Massachusetts (636), Hawaii (632), Washington state (628) and New York state (628), whereas D.C. came in at 627. The states with the lowest average scores were Mississippi (572), Arkansas (577), West Virginia (580) and Alabama and Kentucky (582).
In addition to the obvious factors like late payments, there are a few lesser-known factors that contribute to your score, such as credit utilization. The report also suggests that more than half of Americans use more than 70% of their credit line — not the best strategy if you're trying to keep your credit score healthy and take advantage of cards with great benefits like the Citi Prestige. If your score isn't the healthiest — have no fear, there are plenty of strategies to get you started.
Wondering what your score is? There are a few cards that offer free FICO reports as part of the card's benefits.
H/T: Bloomberg
TPG featured card
at Capital One's secure site
Terms & restrictions apply. See rates & fees.
| 5X miles | Earn 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel |
| 2X miles | Earn unlimited 2X miles on every purchase, every day |
Pros
- Stellar welcome offer of 75,000 miles after spending $4,000 on purchases in the first three months from account opening. Plus, a $250 Capital One Travel credit to use in your first cardholder year upon account opening.
- You'll earn 2 miles per dollar on every purchase, which means you won't have to worry about memorizing bonus categories
- Rewards are versatile and can be redeemed for a statement credit or transferred to Capital One’s transfer partners
Cons
- Highest bonus-earning categories only on travel booked via Capital One Travel
- LIMITED-TIME OFFER: Enjoy $250 to use on Capital One Travel in your first cardholder year, plus earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months from account opening - that’s equal to $1,000 in travel
- Earn unlimited 2X miles on every purchase, every day
- Earn 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
- Miles won't expire for the life of the account and there's no limit to how many you can earn
- Receive up to a $120 credit for Global Entry or TSA PreCheck®
- Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
- Enjoy a $50 experience credit and other premium benefits with every hotel and vacation rental booked from the Lifestyle Collection
- Transfer your miles to your choice of 15+ travel loyalty programs
- Top rated mobile app