How Does Your Credit Score Compare?

Written By:

Last Updated:February 16, 2022

Joy Wallet is advertiser-supported: we may earn compensation from the products and offers mentioned in this article. However, any expressed opinions are our own and aren't influenced by compensation. To read our full disclosure, click here.

When it comes to personal finance — and let’s be honest, many other parts of our lives — we can’t help but be a little curious about how we compare to others. While each of us has our own financial journey, and we shouldn’t spend too much time with comparisons, there are times when it’s helpful to understand where others are in their journey too.

The same is true with credit scores. There are benefits to understanding where the rest of America falls along the lines of FICO® Scores* and other financial indicators. This gives us a better idea of what to strive for, and how a lender may view us when we need to apply for credit.

Fortunately, Experian has satisfied some of this curiosity for us by publishing the State of Credit 2021. It’s a fascinating look at how consumers’ behavior with credit shifted during the pandemic. But it’s also a great tool to review our own financial health.

More importantly, what can we learn from these trends that can help us make wise financial decisions when it comes to our own credit? Perhaps there is something we can take from this information to better our own financial management.

Jump To

The average credit score

Let’s get right to it. Experian’s State of Credit 2021 showed the average VantageScore for Americans in 2021 increased to 695. This is up +7 points from the previous year. The average FICO Score also improved to 716.

There are several potential factors to explain this, according to Experian. For starters, missed payment reporting is down. This means not all creditors reported when someone paid 30 days or more late. Plus, some lenders gave accommodations for payments without additional penalties. Only 1% of Americans had missed payments over 60 days.

Secondly, the stimulus checks were likely put towards debt payoff by a portion of Americans. When we received money from the government, some people were able to apply it to debt.

Undoubtedly these are not the only contributing factors, but these were the two cited by Experian as having the largest impact.

Ranked #1 by Top Financial Sites

Credit Saint takes action to fix unfair or inaccurate negative items harming your credit.

90-day money-back guarantee
Free consultation
200k happy customers
19 years experience
11,000+ five-star reviews

Get a free consultation

The good credit score range

The report also reveals that 21% of Americans now have a credit score of 670 or above. This is significant because a FICO® Score of 670 or better is considered within the “good” credit score range.

For borrowers, landing in this credit score range or better means you should qualify for most loans and credit. While you may have to pay a higher interest rate versus someone with an excellent credit score, obtaining credit should not be an issue if your score is 670 or higher.

Average credit card debt has decreased

Another interesting trend coming out of 2021 was the increase in credit card debt. The average American’s credit card debt increased creased to $5,525 in 2021 versus $5,313 in 2020.

This may not seem surprising given rising prices due to the pandemic-stricken inflation taking place across the country.

Student loan debt continued to show an increase in 2021 as well. After hitting a record high of $36,510 in 2020, it climbed once again to $37,062 in 2021.

Everyone’s personal finance story is different and we may never fully realize why credit scores change when they do, but it is compelling to see how specific types of debt either increased or decreased.

Millennials increased their credit score average the most

Of all the generations, the Millennials realized the biggest increase with credit scores — even with their side parts and skinny jeans.

The average credit score for Millennials (ages 24 to 39) rose from 648 to 667 between 2019 and 2021.

While this information on consumer behavior may be interesting to some, what really matters is your own credit score and why your credit history and score is something that follows you wherever you go.

Credit score basics

Your credit information is reported by lenders each month to the three credit bureaus — Equifax, TransUnion, and Experian. The bureaus provide information regarding your credit history and usage. This history and data around usage feed into a calculation, which is how your credit score is calculated.

Credit scores are calculated by using complicated credit scoring models. There are two types of credit scores and scoring models mainly used: FICO® and VantageScore®. When you are applying for credit, you have no way of knowing which credit scoring model the lender is using, but 90% of lenders use the FICO model.

Each model has a set of credit score ranges, which looks like this:

FICO credit ranges

Very poor: 300 to 579
Fair: 580 to 669
Good: 670 to 739
Very good: 740 to 799
Excellent: 800 to 850

VantageScore credit ranges

Very poor: 300 to 499
Poor: 500 to 600
Fair: 601 to 660
Good: 661 to 780
Excellent: 781 to 850

Read: FICO® vs VantageScore®: What is a Credit Score?

important: If you need to rent an apartment, finance a car, apply for a private student loan or personal loan, or a mortgage or store credit card, your credit score may be pulled.

Why is it important to understand our credit score?

Sure, it’s interesting to see how our credit score compares to others and what range we fall into, but why is there so much emphasis on this number in the first place?

Your credit rating is the number assigned to you to show lenders your creditworthiness. The higher your score, the less risk you pose in the lender’s eyes. The bottom line is, if you ever need to use credit, you need a credit score. If you need to rent an apartment, finance a car, apply for a private student loan or personal loan, or a mortgage or store credit card, your credit score may be pulled.

But this isn’t the only reason. Your credit score also determines the interest rates you are approved for. If you have a lower credit score, your interest rates will be higher, which means you pay more interest over time. An excellent credit score allows you to get the approval you need while paying the most competitive interest rate.

Ranked #1 by Top Financial Sites

Credit Saint takes action to fix unfair or inaccurate negative items harming your credit.

90-day money-back guarantee
Free consultation
200k happy customers
19 years experience
11,000+ five-star reviews

Get a free consultation

Improving your own credit score

If you’ve reviewed this information and decide you don’t like where you fall within the credit score range or how you compare to the rest of America, the good news is, there are actionable steps you can take to improve your own score. Remember, your credit score is updated with the major credit bureaus any time a creditor sends new information, so you can see results from your work within a short period of time.

Keep your payment history positive. There is no other way to say it. If you pay your bills on time (within 30 days) then your payment history will be reported as positive. Payment history is 35% of your FICO® Score, so paying your bills on time and consistently leads to stronger credit scores.
Keep credit utilization low. Credit utilization refers to how much of your available credit you use versus what is available to you. For instance, if you have a total of $2,000 worth of credit limits across your credit account, but you only use $200 of your limits, then you have a utilization rate of 10%. Keeping your credit utilization at 30% or lower is ideal to maintain healthier credit scores.
Keep credit inquiries to a minimum when possible. Anytime you apply for new credit, this is reported in your credit report. Any inquiry has the potential to hurt your credit score.
Use a credit score boost program with the credit bureaus. Experian® offers credit score boosting programs. This program pulls your payment history from regular payments, such as utility bills and cell phone bills, that are normally not reported on your credit report. Once these payments are added to your credit report, you can see a nice bump in your credit score.
Take advantage of a credit monitoring program. Many programs, including Credit Sesame®, offer free credit score monitoring services. This is where you are notified each month if your score has changed and if there are any new inquiries. You can even see your FICO® Score for free with some sites, such as your bank or credit card company.
Credit mix can help. Although not as much of a factor, your credit mix could impact your score. This means using different credit tools, such as a line of credit, a mortgage, and a credit card. This is viewed more favorably than using all credit cards, or all student loans for instance.

The bottom line

While you shouldn’t spend too much time comparing your financial situation to others, knowing where your credit score lands versus others could be useful. This may be the motivation you need to focus on improving your own credit score, or it may indicate to you that you are making great progress and should keep up your hard work.

*Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.

Ranked #1 by Top Financial Sites

Credit Saint takes action to fix unfair or inaccurate negative items harming your credit.

90-day money-back guarantee
Free consultation
200k happy customers
19 years experience
11,000+ five-star reviews

Get a free consultation

Joy Wallet is an independent publisher and comparison service, not an investment advisor, financial advisor, loan broker, insurance producer, or insurance broker. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. Joy Wallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Featured estimates are based on past market performance, and past performance is not a guarantee of future performance.

Our site doesn’t feature every company or financial product available on the market. We are compensated by our partners, which may influence which products we review and write about (and where those products appear on our site), but it in no way affects our recommendations or advice. Our editorials are grounded on independent research. Our partners cannot pay us to guarantee favorable reviews of their products or services.

We value your privacy. We work with trusted partners to provide relevant advertising based on information about your use of Joy Wallet’s and third-party websites and applications. This includes, but is not limited to, sharing information about your web browsing activities with Meta (Facebook) and Google. All of the web browsing information that is shared is anonymized. To learn more, click on our Privacy Policy link.

Images appearing across JoyWallet are courtesy of shutterstock.com.

Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.

Share this article