Average Credit Score is 692 (out of 850). The median credit score is roughly 723 in 2011.

60% of Credit Scores are over 700, most experts believe that when a 720 or above there is little need to increase the score. (Read More: Guide: What’s a Good Credit Score)

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Credit scores are one of the most important factors determining whether or not a consumer will be approved for a loan or line of credit. While at one time a bad credit score would only hurt those trying to borrow money, in today’s economic climate, credit scores are the new method of determining a person’s credit worthiness. Because of this your credit score is now viewed by insurance companies to determine rates, landlords to determine if you will be a good tenant and even potential employers when you apply for a job. Here we look at what is considered an average credit score and what consumers with this score can expect from those viewing this score.

What Is the Average Credit Score?

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Because the credit scoring system is subject to change from time to time, let us consider what average actually means when referring to your credit score. While the actual number may go up and down depending on the current “rating” system, the true measure of where you stand is your rank. For example, the median credit score or average score is ranking you in the middle of the population. Consider your score as where you land compared to the rest of the population. If you have bad credit, there may be only 5% of the population with a lower score than yours. If you have excellent credit, you rank in the top 5% of the population with 95% of your peers having a lower score. An average credit score means you are ranked in the middle, with the same number of people having a score that is both higher and lower than yours.

What To Expect With An Average Score

Consumers who fall within the “average” range on the credit rating system can expect a slightly difficult time getting approved for credit or loans. Despite being in the middle of the population, lenders and creditors have really raised the bar when considering a persons credit worthiness. For this reason, those with average credit can anticipate some challenges when applying for certain loans such as a mortgage or car loan. An average credit score will usually be sufficient for credit cards and other revolving lines of credit, however the terms and conditions associated with these accounts will likely be average at best.

The best interest rates and other perks are reserved for individuals with excellent credit as they pose the lowest risk of default. With this in mind, an average credit score will certainly get you farther than a bad credit score which virtually eliminates the chance of being approved for most credit cards or other loans. Those who are able to secure credit with a bad credit score can expect the very worst terms and highest interest rates. In general, anyone with less than excellent credit should always strive to improve their score and move further up the rank to be approved for credit and improve terms.