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Understand Your Credit Score

According to Experian, the average FICO Score in the United States reached 715 in 2024.*

If you have some familiarity with credit scores, you may know that any score above 700 is good. Even with that knowledge, there are still a lot of questions as what this score means in the first place.

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What Makes Up a Credit Score?

Since the introduction of the FICO score, credit scores generally range from 300 to 850. Depending on your credit history and the type of account you are trying to open, you could find yourself outside of this range. One example is the industry-specific FICO score for auto lenders, which can go as low as 250.

As you navigate through your financial journey, your score changes constantly based on these factors:

Payment history (35%)
Amount owed (30%)
Account length (15%)
Mix of account types (10%)
New credit (10%)

Your income, account balances and spending habits do not factor into your score, even though they are vital parts of your financial health.

When you make a payment on your credit card, open an auto loan or sign a lease, all these activities contribute to your overall score. Actually, you have three scores—one from each of the major credit bureaus.

Your score with Experian may be different from Equifax or TransUnion. Check with each from time to time. You never know which lender, creditor, employer or insurance company will use which bureau.

Why Does a Credit Score Matter?

Knowing your score is half the battle, but knowing why it’s important is just as crucial.

In 1989, the Fair Isaac Corporation introduced the FICO score, a generalized credit score with subjective and character-based assessments removed from previous iterations. This is the type of score still used to this day in order to determine whether you can borrow money or get insurance coverage.

This measure of whether your score qualifies you for certain financial activities is called your “creditworthiness.” With a strong score, you could get approved and qualify for lower interest rates for loans and credit cards. It pays to build a healthy credit history.

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Get a Clearer View of Your Credit

Stay on top of your credit score with the Vantage™ mobile app! Monitor your progress and get real-time updates.

Do you have an experienced financial partner to help you navigate credit with confidence? Vantage offers one-on-one conversations with financial coaches to answer questions and provide guidance.

Hear firsthand how we helped Carrie Knight improve her credit score — watch her inspiring video!

Let’s reach for success together. See what you could achieve with our team by your side!

*Source: Experian