subject: What Is The Average Credit Score - Discover the secrets to the Average Credit Score [print this page] What Is The Average Credit Score - Discover the secrets to the Average Credit Score
Ever since the recession hit the U. S. of A. An average credit score has become a hot topic of discussion among the average citizens who were at one time oblivious to the fact that a term like the average credit score even existed. So what exactly is the average credit score? Introduced in the 1950's by two gentlemen by the name of Bill Fair and Earl Isaac, the average credit score was a simple yet a practical way of computing a credit score. It was a mathematical formula which calculated a person's credit worthiness depending on which interest was charged. Lower the average credit score, the higher the interest and conversely. However, it wasn't to be an instant hit until some of the first ever credit card companies started using the average credit score in the late 50's and 60's.
The formula was then refined by the Fair Isaac Corporation (FICO) as the demand for credit started rising among Americans. Nevertheless, it was not until 1989 that the first general score-courtesy FICO was issued by a credit bureau. Ever since, Americans have been busy making efforts to get a good average credit score which ranges from 650 to 720. It is obvious that higher the figure, the higher the average credit score.
Most people believe that the national average credit score to be around 678. Though this value is commercially accepted all over the U.S., and one of the co-founders of FICO claims it to be 723. When mathematically calculated, 723 is indeed the correct value as it means that 75 million people have an average credit score lesser than yours, and also 75 million people have an average credit score greater than yours. None the less, 678 is still used for commercial purposes by all money lenders.
Conversely, most money lenders will tell you that an average credit score of 678 is good enough, but it's important to remember that it is the national average which means that most people have the same score as you. So, it is worth the effort to try to move a bit higher with your average credit score. With the growing trends of loans, the concept of an average credit score is one surely cannot afford to ignore.
