That's ten points higher than I guesstimated! Only 21 points left til prime borrower status. I have about $4k left in balances to pay down. My util. ratio is under 30%. I have one 30d-late to deal with. Wish me luck, I guess.
What is or is not "prime" status is totally up to the lendor. There is no rigid definition of what any individual lendor uses in their evaluation. While FICO posts a generic chart of general ranges, and generally 760+ is listed as their "top tier," most lendors consider 740 as top. The average national FICO score is just over 720, so at that level you are average. And also remember that FICO scores are not pegged directly to most lendor's decisions either to grant credit, or the rate of interest they offer. If you are going for a higher principal loan, or a mortgage loan, they will also most probably look at other risk factors, such as debt to income, which is not even considered in generation of your FICO score. So dont worry about the labeling of FICO ranges.
Where did you get your information that the average national FICO is 720? Most lenders do, or have in the past, consider 720 to be a qualifying score for prime credit--hardly the average.
From FairIsaac (per myFICO web site), and from their analysis for credit reports for the past year. It is publicly posted by them. Actually, it a few points above 720. The current average national FICO score is in the low 720's. This is not my guess, it is what is posted by FairIsaac.
The posted national average for FICO score is 723; In 2007 the breakdown was as follows: PERCENTILE % OF PEOPLE SCORE DELINQUENCY RATE 2nd 2% 300-499 87% 7th 5% 500-549 71% 15th 8% 550-599 51% 27th 12% 600-649 31% 42nd 15% 650-699 15% 60th 18% 700-749 5% 87th 27% 750-799 2% 100th 13% 800-850 1%
The average should be the score that 50% of the people are below. The 60th percentile is 700, which means that 60% of the people are below 700. Therefore the average can't be 723. By biz's breakdown, 60th percentile is 700-749. That means that 60% are below 700. Ergo, 50% must be below some number less than 700. I never could figure out how they did math. It's like a course I was taking. You need 80% on a quiz to pass. You could take it as many times as you want, so I usually went through and did it, then went through the material and checked. I once got 66% and it said my performance was very good. How can that be--it's failing!!!
Actually, it's about the distribution, or grading on the curve.. PERCENTILE % OF PEOPLE SCORE DELINQUENCY RATE 2nd 2% 300-499 87% 7th 5% 500-549 71% 15th 8% 550-599 51% 27th 12% 600-649 31% 42nd 15% 650-699 15% 60th 18% 700-749 5% 87th 27% 750-799 2% 100th 13% 800-850 1% In the above distribution, 42% of the "population" have a score below 699, the "60%" group covers the score range of 700-749. So, somewhere in that 60% is the median or average. If the 18% group of 700-749 were "equally distributed, then the median or average would be exactly 725. So, there must be a few more near the lower end to pull the average down. What skews the perception of the average FICO score, is the large number of people with good scores. The greatest population group is for scores of 750-799, (and the odds are they are not on this board!). It is a bit funky how the numbers work, but 723 does come out to the right number. I have also seen the geographical distribution across the U.S.. There are some areas where the average is in the 670-690 range.
Also, don't forget that there is more than one "average." You all seem to be talking about the median... the point where half the people score worse (and half score better). The score that's right in the middle. The more common usage of "average" would be the mean. The mean could be much higher than the median. For example, maybe the scoring algorithm has a minimum score -- no one is ever below 350, for example. Or maybe there are a few people who score the maximum possible, and then a big gap before you get to a bunch of scores in the 700-750 range. Either of these conditions would skew the "average" score (ie the mean) the be higher than the median score.
You're absolutely correct, in this case the data seems to still put the number around that 715-725 number; there are lot a different "averages" out there. They have been calculated in different "sets" as well. The overall summary is that the "average" FICO credit score is higher than many people think, and on general most people do have good credit.
