The Credit score is based on the financial history. There are three major credit bureaus including Equifax, Experian and Trans Union. These bureaus have slightly different version of scoring. Due to this reason, scores are different for different individuals.
Average credit score is calculated by checking individual credit scores from huge database and then taking average of all scores. Credit history length depends on type of credit, how much you have debt, and speed of filling new credit applications.
Credit scores are in the range from 300 to 850 on a scale. 850 score is considered to be the highest credit score that an individual can achieve. But what’s the average score? According to Experian 692 score is assumed to be best average credit score in America and many other countries. People having score above 800 are very few. Roughly calculations state that almost 13 percent people have score more than 800 and 15 percent are having score less than 550. A good credit score starts from 700. 58 percent people from American populations have credit score above 700. It means most of the people have good score.
From above discussion it could be said that average credit score 692 is not bad as good credit score is 700 which is fewer scores greater than average score. It is good score in order to achieve good interest rate.
Calculations figure out that if you fixed your interest loan with 620 score for 30 years of your life, you may be able to pay 7.693 percent interest. Your interest can lead to 12.018 percent on the same loan if you have 619 score.
Credit score facts in different US states:
Experian gathered some credit score facts in united state which are based on information from credit score database.
Consumers from Minnesota contain 721 score which are considered to be best credit score. There are almost 18 states which have credit score less than average credit score. Nevada State has average score of 66 means 50 points lower than Minnesota. There are 32 states that contain credit score greater than average credit score.
Factors which affect credit score:
Two factors payment history and outstanding dept influence 65 percent of your total credit score.
Payment history affects 35 percent on credit score. It could be calculated with payment pattern to lenders or creditors. Basically it affects on how frequently loans are giving back and bills are paying on time.
Another factor which affects credit score is Outstanding Dept. 30 percent of credit score is affected by this. An increase in dept will eventually decrease your credit score. So to achieve average credit score, you must keep these two factors in your mind.
To achieve an average credit score, take help from these steps.
- Pay your bills on due date.
- Have a look on your previous monthly report and try to avoid mistakes which you have done.
- Be sure that your balance is at 25 percent of card limit or less than this.
- Avoid your balances to transfer.