We take that you probably don’t know anyone who never needed to borrow money. But, when it comes to lending money, should a lender trust anyone with his or her money? Well, it is probably best to learn more about the person before making a decision, right? And a good credit score can be of help during this process.

Basically, a credit score is the traffic light your potential credit lender will pay attention to before deciding which way to go, er, whether or not it is a good idea to lend you money, and how much risk is involved in this decision. On one side, there is the lender, and on the other side, there is the borrower.

The borrower’s financial habits will be taken into consideration by the lender, like how often the borrower pays on time and how much of the credit limit s/he uses. This is just a more simple way of saying “credit score.” But what is a credit score? There’s no need to rush because you will find out very soon all the basics about it and how to improve yours — even if you do not know if yours needs improvement.

A credit score is usually a three-figure number used by scoring companies to represent the borrower’s creditworthiness. The higher the score, the better the lender feels about giving credit. The lower the score, the less it seems that the borrower meets her/his commitments.

In order to get the best products on the market, you should definitely keep an eye on your credit score. So, if this interests you, here on our website you can find posts about how to improve your finances and also about how to choose a credit card.

No institution can better explain this to you than a credit reporting agency. Whenever you need new information about this subject, you can always contact or visit the website of an agency. The main ones are Experian, Equifax, TransUnion, and Innovis.

There are credit card options that even offer benefits that were designed thanks to partnerships with such reporting agencies, did you know that?

FICO ^® Scores are one of the most widely used credit score systems, being out in the market for more than 25 years. The system creates different credit scores, which range from base to industry-specific credit scores.

Base scores range from 300 to 850, in which good scores go from 670 to 739. In turn, industry-specific credit scores have a different range, which goes from 250 to 900. However, the middle categories, have the same groupings and good industry-specific FICO® Scores still range from 670 to 739.

Another scoring model that is very used in the market, by the same credit scoring agencies, by the way, is VantageScore’s, the two newest ones being VantageScore 3.0 and VantageScore 4.0, both with a 300-850 range. They are equal to FICO®’s base scores, where the range from 661 to 780 is a good range.

You don’t need to be very good at math to understand this. Also, knowing this data can help you analyze how easy or difficult it is to obtain a certain score.

According to data from Experian, which are available online, the average FICO® Score in the USA rose to 711 in 2020, meaning an eight-point increase from 2019, being the most significant increase since 2016, a four-point increase from 2015.

Credit scores have been increasing year after year during the last ten years. Furthermore, during the COVID-19 pandemic, this increase was even more surprising. Approximately 21% of Americans had a good FICO® Score in 2020.

Average credit scores also vary by age, which is another important factor to take into consideration when analyzing your credit profile. The older you are, the more experienced with credit you are, the higher your credit score will be.

The elderly group, who are 75 or older, has the highest average FICO® Score in comparison to any other age group. They are called the silent generation and have an average score of 758, according to Experian’s website.

On the other side, the group of young adults, who are 18 to 23, have the lowest average score. This age group has an average score of 674.

Across the 50 states and Washington, D.C. of the United States, consumers watched their average credit score increase since 2019. This resulted in an average score improvement in the entire country in 2020. Last year, Minnesota remained the state with the highest average score, at 739.

Especially in this difficult time that we are facing, it is essential that you control you credit score. So, make sure yours is accurate. Your credit reports are given by the agencies, but they are not responsible for calculating, or even creating, the scores. Also, your report does not include your credit score. But you can get your credit score from your credit card company for free. Or you can buy it from one of the agencies.

You have the right to a free report, from Equifax, Experian and TransUnion, on annualcreditreport.com. In addition, due to the COVID-19 pandemic, as there is people experiencing financial struggles, free credit reports are being offered for free on a week basis until next year.

It is easy to apply for a free credit report: (i) you can visit the website annualcreditreport.com; (ii) call 1-877-322-8228; or (iii) complete the annual credit report request form and mail it to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281.

In case they do not accept your free credit report request, contact the CRA directly. They will explain to you the reason they didn’t accept your request and what are the next steps. Maybe a piece of information was missing or incorrect on your application. But in case this does not work as well, contact the Consumer Financial Protection Bureau.

The lowest FICO® Score and VantageScore possible is 300. If your credit score falls under the Poor/Very poor range, then you won’t have access to the best products in the market, especially without a co-signer. This represents 5% to 21% of the United State’s population. So, we truly recommend that you request your reports and credit scores everytime you can.

The good news is, if you didn’t have access to your credit information yet, there is probably no reason to worry, as we have already mentioned that the pandemic is not causing too much damage on people’s credit profile. However, just to be sure, always have this information with you from now on.

Bottom line is that, if you are used to meet your credit commitments, then most part of your problem is solved.