Credit card debt in the U.S. has soared to an all-time high of $1.211 trillion, but despite that, many Americans are keeping their credit scores strong. According to Experian, the average FICO® score in 2025 is 715—holding steady since 2023. While that’s still considered “good,” it’s a bit below the 718 peak we saw in 2023. So, how does your score compare, and more importantly, how does it affect your ability to buy a home?
Let’s break it down.
Key Factors That Impact Your Credit Score
Your credit score is a three-digit number (ranging from 300 to 850) that tells lenders how responsible you are with credit. Here’s what impacts your score the most:
- Payment History (35%) – On-time payments are the biggest factor.
- Credit Utilization (30%) – The amount of credit you use compared to your limit.
- Length of Credit History (15%) – Older accounts boost your score.
- New Credit (10%) – Too many applications in a short time can hurt your score.
- Credit Mix (10%) – A healthy mix of credit cards, loans, and mortgages is ideal.
What Is a Good Credit Score and Why Does It Matter?
Different lenders have slightly different criteria, but generally, here’s how your FICO score stacks up:
- 800-850: Excellent – You’ll qualify for the best rates.
- 740-799: Very Good – You’ll get competitive interest rates.
- 670-739: Good – You qualify for loans, but not the best rates.
- 580-669: Fair – Higher interest rates, stricter approvals.
- 300-579: Poor – Difficult to secure loans.
With an average score of 715, most Americans qualify for decent mortgage rates. But if you want the absolute best rates, you’ll need a score above 760.
How Does Your State’s Average Credit Score Compare?
Some states have higher average scores than others.
- Minnesota boasts the highest average FICO score at 742.
- Mississippi comes in with the lowest, at 680.
Your location doesn’t dictate your financial future, but it can be interesting to see how your state compares.
Want a Better Credit Score? Do These 4 Things
If your credit score isn’t where you want it to be, don’t stress—you can improve it! Here’s how:
- Pay Down Credit Card Balances – Keep your credit utilization below 30%, but ideally under 10%.
- Request a Credit Limit Increase – This lowers your utilization ratio without increasing debt.
- Check Your Credit Report for Errors – 1 in 4 credit reports have mistakes that could hurt your score. Reviewing and disputing errors can lead to a quick boost.
- Negotiate Removal of Negative Marks – If you’ve paid off past-due debts, ask creditors to remove them from your report.
Why Your Credit Score Matters for Buying a Home
Your credit score directly impacts your mortgage options. A higher score means:
- Lower interest rates (saving you thousands over the life of your loan!)
- Better loan programs with lower down payments.
- Easier approvals with fewer hurdles from lenders.
If homeownership is your goal, improving your credit score should be a top priority.
Your credit score in 2025 plays a huge role in securing the best mortgage rates and loan terms. If you’re looking to buy a home, now is the time to check your score, make improvements, and get pre-approved.
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