Do you know what is the average American credit score? How does your credit score stack up? Do you have a good credit score rating or a bad credit score rating? Find out all this and more in this hub about credit scores.

Back in 2005, Experian said the average credit score was 678. In March of 2008 the average was bumped up to 692.  This is on a scale of 300 to 850. This is the credit score range for FICO scores.

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But Experian is only one credit reporting agency and they have their own proprietary credit score formula.  Transunion and Equifax have their own formulas for computing their credit scores. And their averages may be different than the others.

So while you may be concerned about what the average is for American consumers, what you should be more concerned about is is your credit score good or bad?

Let's say you have an average credit score, is that a good credit score rating to have?

Nowadays, it is not. If you have 650 to 700 score you are just considered "Fair." You are considered a fair risk and are given Ok rates of interest on your auto and home loans and Ok rates on your credit cards. You probably have interest rates in the low to mid teens. You are also probably getting your credit lines reduced even if you have been paying all your bills on time.

You need a 750-850 to be considered "Good" or "Excellent."  You present the lowest risk to your lenders and they reward you by giving you the lowest interest rates. You get the lowest home and car loan rates. You also have single digit interest rates and your credit lines are not getting reduced.

And if you have a 650 and under you already know the bad news. You've been paying higher interest rates for all your loans and credit cards.  You are probably getting all your credit lines reduced and your rates probably increased as well.

What does this all mean to you? Well that depends on your credit score. That will tell you if you have a problem or if you are doing well financially. Your high credit score will tell you that you are doing well financially and your low credit score will reflect that you are just barely getting by to make ends meet and you are experiencing financial difficulties.

So how do you overcome having an average American credit score? Pay your bills on time, lower your debt load, keep your aged accounts open even if they have no balance on them and refrain from opening several new accounts. This simple steps will help you improve your credit score over time.

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