Average American Credit Score – Is It Good Enough
What is your credit score based on and what’s the average American credit score nowadays? How do you fare in comparison with your fellow Americans? Is your rating higher or lower than the average American credit score? Almost everyone knows that there is such a thing being a credit score and that it is depending on your past credit performance, however, not many people really know the how to go about credit scoring.
First of all, the best credit score that exists is 850; conversely, the lowest is 300. Of course, the majority of folks fall between those two extremes, and in reality, the average American credit score is about 690, but with the tough economy and unemployment on the rise, it is likely that individual credit scores will begin to fall, knowning that means the average credit score will begin to fall right along with them.
However the average American credit score seems pretty high, at 690, that is certainly really not “good enough” to get the best credit terms from most lenders. Most banks and other lenders utilize credit history and credit score to determine whether or not they will lend you money, whether or not they will require collateral from you, how much interest they will charge you, and how long they will give you to repay your loan. Obviously, the better your rating, the higher deal you will get at the bank.
However, there are no hard and fast rules which are uniform across the banking industry, most financiers reserve the best rates for people with a score of 720 or better. That means that if you are just average (690, remember?), about to catch likely to qualify for the best interest rates and terms. Naturally, the policies of the different institutions vary, and right now, a lot of bankers are turning down requests for loans for anyone who is well below the average American credit history, and traditionally, even in the most effective economy, a score below about 620 would get you the absolute worst deal.
Some economists predict that within a few years, however, the lenders will be not able to be as particular about whom they provide loans to and will have to be a bit more flexible about terms; the idea revolves around the fact that banks earn money by lending it out. That is the fact; that is why they do it; they do not lend you money just to satisfy you. That being the case, they must lend, and if the average American credit history drops significantly, banks can have fewer options. But the period will not come very soon or perhaps the immediate future; at this time.
When the economy is tough, the banking industry gets more conservative rolling around in its policies; if you are in the market for a big-ticket item for instance a house or a car now (or is going to be soon), you should make every effort to maintain credit history on the up or over so you can stand out as better than average and can get yourself the best bargain possible when you need to borrow money.
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