Experian Finds Womens FICO Score Same as Mens

21 May

According to credit bureau Experian, the average credit score of women is now the same as the average score for men. The average score for both is currently 705 which represents a a one-point increase since the second quarter of 2019 for women and a 10-point increase for both men and women since the second quarter of 2015. 

Here is a quick breakdown of what is considered a good credit score as well as how to improve your credit score if aren’t currently falling into the top tiers:

The Advantages a Good Credit Score Bring

According to Experian, a score of 705 falls into the “Good” category. Experian breaks credit scores into the following categories:

  • Very poor: 300 to 579
  • Fair: 580 to 669
  • Good: 670 to 739
  • Very good: 740 to 799
  • Excellent: 800 to 850

Experian found that of the people scoring 705, roughly a third of them had late payment reports dinging their report. In addition, 42 percent of them had an auto loan and 29 percent were carrying a mortgage. The average person with a credit score that fell into the “good” category has 4.7 credit cards. 

A good credit score comes with a variety of advantages. Everything from getting an in-demand apartment (landlords check credit scores of potential tenants) to saving money on a mortgage, car loan and even homeowners insurance. 

 Insurance companies use your credit score and other factors to set your premium on both homeowners and auto insurance. A poor credit score can push up your premium dramatically. If your credit score has improved since you first purchased your policy, have your insurer recheck your premium based on your new score. 

In addition to lowering your insurance premium, a good credit score can help with these issues as well:

  • Credit Cards: Unless you have horrible credit, you can most likely get a credit card, but consumers with good credit get a better interest rate and perks. 
  • Interest Rates: Lenders check your credit score for any type of loan and the lower your credit score the higher your interest rate. Your credit score will impact the interest on just about any type of loan and over the course of a mortgage (20 to 30 years) even a small percentage increase can end up costing a substantial amount of money. 
  • Employment: Many employers run a credit check during the hiring process and a bad score may prevent you from getting that dream job. This can be especially true if the job involves access to company money, customer data or other sensitive information.
  • Utilities: Utility companies run a credit check before turning on the power or water and if your credit score is in the toilet you may have to leave a sizeable deposit with all of your utility companies. 

Improving your credit score

If your score is lower than the average 705, you are certainly not alone. According to Experian, 40 percent of FICO scores fall below 705. 

Here are a few tips to improve your credit score:

  • Pay Off Balances: The best way to improve your credit score is to pay down your balances. This can be difficult but can have a big impact on your credit score. Pay more than the minimum payment each month to start chipping away at your balance. A good rule of thumb is to keep your total amount of debt under 30 percent of your credit limit.
  • Pay on Time: A late payment can ding your score significantly so make sure you pay all bills on time. If necessary, pay the minimum amount on credit cards if the choice is to pay it late.
  • Don’t Open New Credit: Recent credit inquires can have a negative effect on your credit score so while you are trying to improve your score avoid new credit cards and loans if possible. 

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