Credit Score Statistical Data

Introduction

Are you looking at buying car or a new house? Have you applied for a credit card? Insurance? A job? The one factor that could affect them all your credit score. This three-digit number between 300 and 900 will indicate your risk level to potential creditors, insurers, and employers.

Understanding Your Credit History and Your Credit Score

Your credit history determines your final number. This system, invented by Fair Isaac Corporation for the three major credit bureaus—Equifax, TransUnion, and Experian—is based on types of credit you’ve had and how long, your payment history, and if you have had any late payments, as well as the status of any current loans or lines of credit.

The Significant Impact of Your Credit Score

Your credit score, in addition to affecting your ability to get loans, insurance, future credit, and even jobs, is also part of a statistical model of the state, country, and region in which you live. This can affect how you are perceived in relation to other loan applicants. For instance, the median (which means half the people surveyed were higher than this score and half were lower) nationwide FICO score is around 723. Someone with that score applying for a loan will fare well, but the further you get below that mark, the more costly the loan will become—if you even get it. People with scores around 600 have been known to get loans, but it costs them dearly.

Your Credit Score and Your Money

What does this mean in terms of money? That someone with a credit score less than 620 will pay around $86,000 more in interest (30 year fixed rate mortgage of $200,000) than the person with excellent credit scores, according to www.myfico.com. This also translates into higher risk for insurance companies—the lower the credit rating, the higher the risk of claims, according to some statistical models.

General Credit Score Statistics

The general breakdown of the credit score bell curve and the corresponding total delinquency rate (for each subsection of scores) looks something like this:

Your Credit Score and Your Future

Because the scores determine much about what happens to your financial life, you can see it pays to keep your score at 700 and higher, and above the national median of 723 if possible. Although som say it’s as hard to keep a good credit score as it is to get credit to begin with, it really isn’t—pay your bills on time, pay off your credit card every month, and never go over your limits.