Is the average credit score really 678?
The national average credit score is around 678, but is that really accurate? I would have guessed it to be much lower, but we’ll get to that later. Here is a chart that breaks down the national distribution of FICO scores.
This chart represents a good, old-fashioned example of how statistics can accurate but misleading at the same time. The numbers above are accurate, but let’s delve a bit deeper. Let’s look at a break down of credit scores by age group.
This chart gives us a whole new perspective on the meaning of “average credit score.” We see here that borrowers over the age of 50 have fabulous credit scores — 697 and up, on average. If all your clients have silver hair, you’re sitting pretty. For the rest of you, credit score is an issue, an impediment to crossing that real estate finish line known as closing.
The reality is that old folks don’t drive the housing market. The typical age of a home buyer is 41. The median age of first-time home buyers is 32. Younger people make up most of the home buying population.
After all the number crunching, average credit score for the population is not the same as average credit score for home buyers. Generally speaking, the younger the home buyer, the lower the credit score.
This means that credit score is important to borrowers, mortgage brokers AND real estate agents. One of the best things that real estate professionals can do is to educate themselves about credit and credit score so that they can help their clients preserve and raise their credit scores.
Posted by: Wade Young Red Door Home Loans