As we enter yet another era of economic growth, the good news continues to pile on; this time, average FICO credit scores have hit an all-time high.
At 704, the average national FICO credit score has been rising since the recession ten years ago. This time, it has reached an all-time high, a statistic that could only add to the Republican president’s resume as his party heads into the midterms.
A credit score is very important for consumers. It determines what interest rate you pay for car loans, mortgages, and even credit cards, as well as if you are able to get a loan at all.
The lowest average credit score was 686 during the ’08 recession when there was a sudden increase in foreclosures. Since then, credit has gotten a lot easier to acquire, and now it’s at an all-time high.
A credit score of 704 is considered “solidly good” by Ethan Dornhelm, the vice president of scores and analytics for FICO. “Consumers will be qualifying for most credit that they are hoping to get.” 700 is generally thought of as a good credit score, while 760 and above is deemed excellent.
The amount of credit that is being offered to people has increased as well. This is because banks feel more comfortable with the current state of the economy as we inch further away from the Great Recession. This is also because they are trying to compete for more customers.
The number of credit card accounts in the U.S. has also risen. However, most Americans are taking out subprime loans, meaning they negotiate their own interest rate, generally because they have a lower-than-normal credit score that prohibits them from receiving a standard rate.
