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FICO is the most widely used credit scoring model, followed by VantageScore.
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Your credit score is a three-digit numeric representation of your credit history that signals to lenders your creditworthiness.
Scores under FICO and VantageScore, the two main scoring models, range between 300-850 with the average score at 716.
A good FICO credit score is 670 or more while a good VantageScore credit score starts at 661.
Your credit score may be one of the most important metrics by which your financial life is measured. It plays a pivotal role in many of your major financial decisions such as applying for an apartment lease, buying a car, and buying a house.
Though the stakes are high, the good news is that credit scores have been steadily rising over the last two decades. The average credit score in October 2005 was 688. As of April 2022, the average credit score is 716.
Credit expert and former employee of FICO and Equifax John Ulzheimer attributes this rise in credit scores partially to the amount of information now available on credit scores (case in point, the article you’re reading at this very moment).
“The amount of information that we have access to for free with respect to credit reports and credit scores is enormous,” Ulzheimer says. “How you earn and maintain your credit score was, 30 years ago, kind of a secret, because no one really knew what a credit score was.”
Catching up to the average credit score, especially if you don’t have a great credit score or any credit history at all, can seem daunting. However, you’re in the exact right place to start.
What is a credit score?
When someone says credit score, they’re usually referring to a credit bureau risk score. This is a “numeric representation of the information on your credit report,” Ulzheimer says. These credit reports come from the three main credit bureaus: Equifax, Experian, and TransUnion.
Scores range from 300-850, though they rarely get close to 300. According to FICO, only 2.9% of …read more
Source:: Business Insider