Average FICO credit score hits new high

I’ve had a perfect 850 credit score for more than a year.

How has my life changed?

Not one little bit.

I’ve been getting about the same number of credit card offers as when I had scores in the 700s. The most I’ve gotten from having a perfect credit score is being able to kid my husband that my score is higher than his. His hovers around 830.

“After a certain point, it doesn’t matter anyway,” he quipped.

He’s right. The widely used FICO credit score ranges from a low of 300 to a high of 850. A high score — along with other financial factors — can place you in a tier that results in the best lending deals. But high scores beyond a certain threshold are pretty much equal.

So it’s noteworthy that the national average credit score has hit an all-time high of 706, according to FICO, the company that created the scoring model used by most lenders.

“That’s a big milestone,” said Ethan Dornhelm, vice president of scores and predictive analytics at FICO. “It’s worth celebrating when you can improve your score to the point that it starts with a seven.”

Since reaching a bottom of 686 in October 2009 during the Great Recession, the national average FICO score has been steadily increasing.

Dornhelm said the key drivers of the improvement in scores have been the U.S. economic recovery, consumer credit educational efforts, and an initiative by the credit bureaus that has led to certain accounts in collections being removed from people’s credit files.

“It’s been a pretty stable and growing economy over the last 10 years, driving things like lower unemployment, which in turn drives consumers being in stronger financial health,” Dornhelm points out.

Increasingly, lenders have been providing free credit scores to consumers. I’ve found that when people know their score isn’t good, they want to work on improving it. The two biggest factors that will boost your score are paying your bills on time and reducing the amount you owe.

So, if your credit score number starts with a 7, you’re in good company.

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