Need an excuse to break out the party hats? How about this: Credit scores are at an all-time high.
This April, the average American FICO score reached 692—up one point in the last 12 months and six points from the all-time low of 686 in October 2009.
FICO ratings sit on a scale of 300 to 850, where scores of 700 to 749 are generally considered good. A score of 692 moves consumers toward that financially healthy threshold—landing at the high end of average.
So to what do we owe the uptick? Experts suggest the increase likely has something to do with consumers’ improved sense of financial responsibility after the Great Recession.
Anthony Sprauve, a senior consumer credit specialist at FICO, suggests the economic dip was a “wake-up call” for Americans to take charge of their finances. “Consumers have become better stewards of their financial house; they’re paying more attention to their finances,” he tells Yahoo Finance. “They’re more educated and more aware.”
As a result, cautious consumers are now aggressively working to lower their debt, which can improve their own credit scores—and ups the average FICO score overall.
If you’re trying to improve your own credit score, paying down debt is indeed a great place to start. To make it easier, consider setting up automatic payments or calendar reminders to ensure you pay your credit card bills on time and save yourself credit headaches in the future.