Credit scores in the U.S. are improving, especially among millennials, according to a new analysis by the credit rating agency Experian.
The analysis shows that the average FICO score in the U.S. hit a record high of 703 in 2019, while the share of Americans with a score of over 700 hit 59%, the highest level since records began.
“Millennials ages 24 to 39 now outnumber baby boomers and are finally hitting their credit stride,” the Experian report notes. “Their economic emergence is reflected by a 25-point increase in their average FICO score since 2012—the biggest increase of any generation.”
The report states that a FICO score of above 700 is considered to be a “marker of good credit” by most lenders. As such, most borrowers would be eligible for the best mortgage rates if they have such a score.
The percentage of Americans with a maximum possible FICO score of 850 has increased 63% in the past decade, according to the report. Around 1.2% of Americans have a perfect FICO score of 850.
“Americans are making better credit decisions,” Shannon Lois, Experian’s head of analytics, consulting, and operations, told HousingWire. “Which is an indication of consumers being more educated about their credit.”
FICO scores range from 300 (considered “very poor”) to 850 (considered “excellent”).
The five states with the highest credit scores were Minnesota (average FICO score 733), North Dakota (727), South Dakota (727), Vermont (726) and Wisconsin (725). Elsewhere, the states with the lowest average credit scores were Mississippi (667) and Louisiana (677), CNBC reported.
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