So, the average score in the state of California is 680 so far. And it has been determined that the national average is 678.
If you want to know more about it, continue to the end. You will have useful information that you can use to your advantage.
California Credit Rating Over the Years
The credit score in California since 2015 has been one of the highest in the United States. It concerns the expensive standard of living in some areas of this region.
From 2015 until now, my credit score has been between 670 and 750. For this reason, California ranks in the Fico Rank in the “good” or “very good” range. Despite the state’s residents’ debt, this score is in the top third.
But the positive statistics reflected in the FICO Rank for California have also warranted negative elements for its residents: Identity theft has been consistently recorded. What’s more, this crime has been higher in California than in any other state in the United States.
How California’s credit scores compare to other states
California has remained in the top three even as the nation began to emerge from the recession in 2012. The states that have outperformed California have done so by very few points.
It has always topped the list along with Massachusetts and New Jersey.
Since that time, the California credit score has been above 670. Today it is above 750 and may be much better in the coming years.
What You Should Know About Credit Scores
The credit score is an essential element used by different financial institutions to know the economic solvency of individuals. It is made up of a code of up to 3 digits.
It is important to know that it is updated every month and is determined through the study of some variables:
- Total overdue payments.
- General debt.
Financial institutions consider that the higher the credit score, the more likely a person will be able to pay each of their debts. For example, this element will be decisive if you wish to request a second credit.
The entities include higher interest and premiums if a person scores much less. That way, they cover their backs by considering that the risk is much higher.
Fico Ranks: How do you know how good the percentage is?
If you want to know when the credit score is poor or excellent, pay attention to the following score range:
- Very poor: Between 300 and 579.
- Fair: Between 580 and 669.
- Good: Between 670 and 739.
- Very good: Between 740 and 799.
- Excellent: Between 800 and 850.
Although FICO defines this range, financial institutions can establish their own according to their needs and requirements. For the same reason, someone can have two or even more credit scores.
But what exactly is FICO?
We have referred to FICO on more than one occasion in this post, and you probably don’t know what it is.
It refers to a specific credit score developed in 1989 by Fair Isaac Corporation (FICO).
In addition, it has been considered a reference tool to know the points of personal and state credit.
For this reason, credit decisions of financial institutions in the United States are 90% based on FICO.
This instrument evaluates the following aspects to make its determination:
- The current level of indebtedness.
- Types of credit requested.
- New credit accounts after creditworthiness have been determined.
- Length of a person’s credit history.
- Payment history.
Elements that affect your credit score
Credit scores will be affected in the following ways:
- Credit usage: The number of accounts with money will be evaluated. But also the amount of debt and the available credit limit.
- Payment history: Paying credit card debts on time will help you considerably to improve your scores. Failure to pay will have the opposite effect.
- Credit duration: Here, the age of your credit cards comes into play. But also the age of each account, regardless of whether they are the oldest or the newest.
- Types of accounts: There are revolving accounts identified with lines of credit such as credit cards. There are also installment accounts identified in loans requested for the purchase of an automobile, personal credit, or mortgage credit.
- Recent activity: This is a consideration if you have recently applied for a new account.
Information that is not considered in credit scoring
FICO does not consider this information when calculating credit scores in California or any other state.
- People’s age. You can always improve your financial information no matter how old you are.
- Nor will they consider information about race, national origin, sex, religion, or marital status. U.S. law prohibits banks from asking for this information when applying for credit.
- Place of residence.
- Banks do not consider occupation, salary, work history, date of employment, occupation, or employer. But independent lenders may consider these data to approve or not a credit instrument.
What to do to improve a credit score?
This way, it is possible to increase your credit score, whether in California or any other region of the United States.
- Pay each of your bills on time: Doing so before the due date will improve your credit history.
- Pay off credit card balances: You can improve your credit standing by keeping your credit card payments current.
- Apply for credit assistance when necessary: This is an important consideration to improve your credit score. If you don’t need it, it is better not to ask for it.