Soaring Credit Scores Point to Economic Recovery - Other News


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Soaring Credit Scores Point to Economic Recovery

Soaring Credit Scores Point to Economic Recovery

The content is accurate at the time of publication and is subject to change.

In a piece of hopeful economic news, an increasing number of people in the US have credit scores in the top range of 800-850. The Fair Isaac Corporation, or FICO, tracks consumer credit history and assigns credit scores based on information from the three major credit bureaus – Experian, Equifax, and TransUnion. Scores are within a range of 300-850, with anything below 600 considered subprime. A credit score over 800 will generally qualify consumers for the best credit cards, with low APRs and high rewards, as well as loans of all sorts.

The FICO survey, released on April 30, found that 18.3 percent of consumers have a credit score in the 800-850 range. While that may not seem like a very big number of Americans, it`s still the highest percentage we`ve seen since the economic crisis of October 2008, when that percentage was 18.7.

Not All Good News

The majority of people, 19.4 percent, fall into the 700-799 level. This number has not yet recovered to pre-2008 status, when 19.6 percent of people had a score in the 700s. Also troubling is the fact that the number of people with credit scores below 600- subprime levels – has grown from 9.6 in 2010 to 9.8 in 2011. Scores between 600 and 649 made the biggest jump, from 2010 when 9.5 percent of consumers fell into this category until now, when a full 10 percent of people are hovering just above the subprime classification.

FICO`s Take on the News

Rachel Bell of FICO says that “Many consumers have moved into the top tier of the FICO Score range by redoubling their efforts to maintain an excellent credit profile. Other people have fallen into lower tiers, most likely due to the financial stress that many households have been feeling.”

Still, she feels that the news is optimistic, overall. Although she acknowledges the shifting numbers are not entirely positive, Bell feels that “Despite this shift, we continue to observe more than half of FICO Scores in the U.S. are between 700-850, which means Americans have managed their credit well despite the economic downturn.”

Strategies for Boosting Scores

What have consumers been doing to achieve those FICO scores between 800 and 850? The biggest thing people can do to maintain a good credit history, or raise a credit score, is simply to make payments on time. Late payments are the biggest factor in low credit scores, and just a few late payments can be enough to damage a decent credit rating.

Some other factors that play into a credit score are the debt to credit ratio – that is, how much of a consumer`s total credit line is available – and type of debt, whether revolving debt or installment debt. Credit card debt is revolving debt, because you can keep borrowing and making payments, theoretically never paying the debt off completely. A mortgage, which is a fixed amount with an installment payment plan in place, is an example of an installment debt.

Bottom of the Barrel

Regarding those with the very lowest FICO scores, those between 300 and 549, the 14.9 percent of people occupying that bracket represents the lowest percentage in the last five years. That may be because, according to Bell, “One possible explanation for the decrease in the number of consumers in the very bottom tier of the FICO Score range is that lenders have written off a lot of bad debt and closed the riskiest credit accounts.” However, those consumers may have begun to do better financially as well. “Some consumers who had multiple bad debts and delinquencies a few years ago are now able to move on, and their credit scores are starting to move into the 550-699 range,” concludes Bell.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

FICO Scores Getting a Makeover
FICO Scores Getting a Makeover

Posted: March 17, 2014

Your FICO score may look a little different starting this summer. The company is releasing a new version of their credit-scoring product, the FICO Score 9, designed to provide more accurate risk assessment across different industries. Continue reading

Free FICO Scores for Commerce Bank Customers
Free FICO Scores for Commerce Bank Customers

Posted: May 21, 2015

Folks who bank with Commerce Bank now have an easy way to keep tabs on their credit ratings. FICO, a leading provider of credit scores, has partnered with the bank to offer free FICO scores to customers on their monthly statements. Continue reading

FICO Moves HQ back to Silicon Valley
FICO Moves HQ back to Silicon Valley

Posted: January 09, 2013

FICO, the company known for its credit-scoring model, has moved its headquarters back to Silicon Valley to better position the firm as a technology leader. Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Introducing the New Citi Rewards+ Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap
For Excellent, Good Credit
Enjoy 70,000 bonus miles after spending $5,000 on purchases in the first 90 days
For Good/Excellent Credit
See Rates & Fees
Perfect credit not required for approval; we may approve you when others won’t
For Fair/Bad Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!