Average Credit Scores by Race

A study of average credit scores for different racial groups shows substantial disparities, with Hispanics scoring on par with the national average, and the average score for Blacks falling below that level. Meanwhile, the White and Asian populations register scores higher than the average. This article looks at how the numbers break down.

What the Credit Score Study Found

Based on FICO score data, the payment processing company Shift calculated that the median credit score across all Americans was 703 in 2019. That's within close range of the 701 average for Hispanic consumers. The Asian population enjoyed the highest credit scores, with an average of 745. That was slightly above the average for White Americans, which stood at 734 in 2019. Black Americans registered an average credit score of 677.

Despite these differences, the averages for all racial groups fell into the Good range, except for the Asian population's average, which would be classified as Very Good.

Credit scores measure a number of financial factors but do not take into account the person's age, race, salary, or where they live. Still, disparities can be driven by differences in take-home pay, how much other debt a consumer has, whether or not they've ever had a credit card, and if they are a homeowner with a mortgage.

For example, "Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates," according to the Education Data Initiative. That debt burden can make it difficult to keep up with other payments, potentially resulting in a lower credit score.

Similarly, credit scoring models tend to favor homeownership, tracking payments on mortgages but generally not on rent or utilities. Since renters make up a higher percentage of Black and Hispanic households compared with White and Asian households, fewer Black and Hispanic consumers can benefit from mortgage-related inputs to their score, while a pristine rent payment record may have no impact.

In addition to race, the Shift study found that credit scores vary considerably among age groups, with younger consumers having lower scores, on average, and older consumers having higher ones.

How Credit Scoring Works

Credit scores can be a little confusing. There are multiple different scoring models, along with three major credit reporting companies supplying the information that feeds into them. However, FICO is the most commonly used system, generating a score of 300 to 850.

The two biggest impacts on your credit score are:

• How regularly you pay your debts on time, which accounts for 35% of your score.
• How much of your available credit you've tapped, which accounts for 30% of it.

In other words, those two factors add up to almost two-thirds of your score.

Weighted less heavily but still important are how long you've had credit accounts (longer is better), how many times you've applied for new credit in the last 12 months (fewer is better), and whether or not you show a mix of credit types, such as a credit card, mortgage, and auto loan (variety is good).

What Is Considered 'Good' Credit?

Experian, one of the three major credit reporting companies, divides quality of credit into five tiers, beginning with Poor and culminating at Exceptional. Anything below 580 is considered Poor, and it takes a score of 670 to move into the Good range. A Fair score falls between the two. Very Good begins at 740, and those with a score of 800 or more enjoy the label of Exceptional.

The Bottom Line

Average credit scores in the U.S. differ by race, age, and other factors. At least part of that has to do with the factors that go into computing credit scores and how those factors are weighted, which tend to benefit some groups more than others.