It may be a surprise to you that American FICO credit scores are at an all-time high. If you need to improve your credit to be among the masses, we've got some tips to help.

Americans finally have good credit. Well, not all Americans, but the average score in the U.S. has risen to 704. That’s a big jump from the average of 688 back in 2005, which resulted mostly from the housing crisis and the rise in home foreclosures.

How have we hit this all-time high? After all, doesn’t America have a debt problem? And don’t we have a propensity to misuse credit cards? Despite these hurdles, it seems as if we’ve all become better at managing our finances.

If you’re not among the masses, we have some tips for you, but first, let’s cover some credit score basics.

What is a FICO score?

Whenever you see your credit score—whether through free credit report services or—it’s either your FICO score or your VantageScore.

They’re similar in pretty much every way, but there’s one big difference. Most free credit services offer your VantageScore, but your FICO score is a more accurate picture of your credit history. In fact, lenders want to see FICO scores, not VantageScores.

While that’s the biggest difference between the two, another difference is that FICO scores, unfortunately, are not free to get.

Why is the average so high?

704 is a solid credit score. Anything over 700 offers you the best odds for getting approved for a line of credit. So how have we made such large strides towards improving our credit scores?

We have access to our scores

Now that we have sites/apps like Credit Karma, it’s easier than ever for us to check our scores on a regular basis.

Knowing your credit score can help you take the right steps needed to maintain it.

Tax liens were removed from some credit reports

Recently, tax liens—liens placed on your property when you fail to pay taxes—were removed from credit reports.

The removal of these liens came about because there was a realization that lenders and debt agencies who report to credit bureaus have no real incentive to be accurate with their information. This meant there were many people with errors on their credit report.

The removal of these liens have helped a number of credit scores. In fact, 17 percent of people who had the liens taken off their reports moved to a higher credit score band.

Many people are becoming more responsible with credit cards

Finally, perhaps the most important reason credit scores have risen is because responsible credit card use has gone up.

With ready access to information from credit card companies and personal finance sites like us, many people have been able to get a credit card at the right time in their life and use them to benefit their credit history.

Why you want a high FICO score

Credit is important. Whether you want to get a mortgage or finance a laptop from Apple, your credit score matters.

Any bank that you want to borrow from will run a hard pull on your credit report. If you have poor credit, or no credit at all, you’ll either get turned down for the loan or get a ridiculously high interest rate.

To give you a picture of everything your credit score affects, here’s a short list of things you’ll need good credit for:

  • Mortgage
  • Credit card
  • Auto loan
  • Good car insurance
  • Job search (some employers check your credit)
  • Private student loans
  • Personal loans
  • Business loans
  • Furniture (if you need to finance it)

How you can get a high FICO score

If you’re not in the good credit score range, there’s plenty you can do to improve your credit. Here are some tips to help get you started:

Get a secured credit card

Using a credit card responsibly can help you build your credit quickly. If you don’t have a credit history, getting approved for top credit cards won’t happen. So, to start, you should look for a secured credit card.

Secured cards are credit cards that you have to put a down payment on, which typically becomes your credit line. With secured credit cards, you’ll have a low credit limit to start, but you can often upgrade to an unsecured credit card after a few months of regular payments.

We recommend the Capital One Platinum Secured Credit Card.

Pay down your student loans

Student loan debt is likely the largest debt you have. If you want a chance at good or excellent credit, you’ll need to start paying that off.

If you have multiple student loans, try refinancing your student loans through lenders like SoFi or Earnest. They can help get you a lower interest rate and you’ll have just one monthly payment to make.

Monitor your credit

Like I mentioned above, the reason credit scores are steadily improving is due to the ability to easily monitor your credit.

You can go through places like Credit Karma.

Tackle your debt

Finally, if you have other debt besides student loans, you’ll want to pay that down as well.

There’s a couple ways you can go about this:

Balance transfer credit card

I’ll start this section by saying that no one should open a credit card if you can’t manage your spending. But, with that being said, if you want to consolidate multiple cards with outstanding debt onto just one card, try a balance transfer.

Balance transfer credit cards are intended to help you consolidate all your debt onto one card that offers a 0 percent APR for a short period (usually 12-18 months). If you can pay off your debt during the introductory period, a balance transfer card is definitely right for you.

Debt consolidation

If you want to avoid credit cards, consider taking out a personal loan to consolidate your debt. Taking out a personal loan mean paying off all your other debts with that loan. Then you’re left with a better interest rate (hopefully) and one monthly payment instead of multiple.

If you want to compare all your possible loan offers in one place, check out an amazing loan aggregator that’s easy to use – Fiona (formerly Even Financial). Fiona compiles the best loan rates (meaning they do all the work for you!) and it’s super quick.


FICO credit scores are at an all-time high in America. If you’re not one of the many who have good credit, don’t worry, there’s plenty you can to do start working on your credit.

Try opening a secured card, paying down your debt, and monitor your credit.

Read more

Related Tools

About the author

Total Articles: 105
Christopher Murray is a professional personal finance and sustainability writer who enjoys writing about everything from budgeting to unique investing options like SRI and cryptocurrency. He also focuses on how sustainability is the best savings tool around. You can find his work on sites like MoneyGeek, Money Under 30, Investor Junkie, MoneyCrashers, and Time. You can find out more about Christopher on his website or via LinkedIn.