Know more about the average credit score

If you're wondering how you compare with the national average credit score, then you don't have to wonder anymore. According to studies conducted by Experian, a credit reporting and credit agency, the national average credit score is 680. Your score determines your creditworthiness. This is your ticket to maximizing your financial potential. Whether you're applying for housing loan, buying a new car and insurance or just about any transaction that requires your credit history, being on the average puts you in a safe place.

The highest possible credit score is 850 and the lowest is 300. Although only 13% of the population are in the above 800 mark, it's safe to be above 700. About 58% of Americans have scores above 700 so striving for more than 680 will increase your financial potential. If your average credit score is a little short of the average, there are many ways to improve it.

Take note that 680 here pertains to the average credit score. This score will serve as your benchmark to further improve your advantage. If you're curious about how the credit agencies measure your creditworthiness, the following can serve as your guide: 35% (pertains to punctuality in payment including those payments turned in not later than 30 days past due); 30% (accounts for the amount of debt, also based on the ratio of credit card balances and credit limits); 15% (looks into the length of your credit history); 10% (concerns the types of credit used whether revolving, installment or consumer finance); and 10% (involves your recent credit search and credit obtained).

The best ways to keep your credit score above average are to always pay your bills on time and do no use most of your credit limits.  You want to only use about 40-50% of your available credit limit.  Using more than that lowers your credit score.  It takes years to build up a solid credit score and only 1 or 2 missed payments to ruin it.