A credit score, also know as a FICO score, is a number, ranging between 300 and 850, which is representative of your financial history. Banks commonly use this number to determine the risk of a potential client not repaying their loan. By maintaining a higher FICO, banks will view you as a less risky client, and offer you lower interest rates and better terms.
What is the Average FICO Score?
Your credit is calculated based on several financial factors, both past and current. Some of the more important of these factors include; payment history, current amount of debt, length of financial history, number of consumer credit cards, and whether you have defaulted on any previous debts.
The average American FICO score is approximately 700-720, which is considered to be good credit and will result in favorable interest rates and terms. The range of this scale spans from 300 to 850, with a higher number representing better credit. Anything above 650 is considered to be good, while anything below this number is considered to be poor or bad credit.
Improve Your Credit – Check Your FICO Score!
Unsure of where your financial history stands? Don't worry, most American's don't know either. If you are curious about your credit and would like to find out what your FICO score is, the Internet offers countless websites to help you accomplish this. By frequently monitoring your credit report, you will be able to eliminate any errors, out of date information, or fraudulent entries, which can reduce your overall score.