Updated June 29, 2010 | By Greg Fisher

The Median FICO Score in the U.S. is 723." - Fair Isaac (see "Secret," 6/29/2010)

For all the confusion, see Fake-O FICO Funk where you will find Fair Isaac stating that the average credit score is not 678 (and never was).

Let's have a little fun. The day this page was first written is February 2, 2007, Groundhog Day. Here are a few of our friends saying what they think the average score is:

• Google: average credit score 678
• Yahoo: average credit score 678
• MSN: average credit score 678

Check in here from time-to-time and use those search engine links to see if the nuts change their ways.

This is like your mother telling you that you only need Ds to get into college, your father telling you that eight yards is a first down, or your science teacher telling you that water boils at 100 degrees Fahrenheit. They tell you the average credit score is 678 when it is 723.

Fair Isaac, the score creator, says that the median is 723. So, which is it: 678 or 723? Somebody is lying. Pop-media commentators don't help (search for the word lousy).

FICO score distribution

Here, the FICO score national distribution [4/4/2014 UPDATE: They removed it; see Fall Part II] is illustrated by a graph [4/4/2014 UPDATE: TransUnion removed the entire website] that shows how many people have what score. Think of your score as a ranking, not a rating. Your FICO lies somewhere on a line between 300 and 850. When you increase your score, you actually move up in the order. At 499 or lower, you rank in the lowest 2% on the scale. At 600, only 15% of the population have a lower score than yours. 723 is the median FICO score. That is the middle of the distribution, where half of the population is lower and half is higher (that is the only average statistic that Fair Isaac has released to the public). If you have a score of 800 or above, you're in with 13% of the population.

But, what does that really mean in terms of a borrower's performance or behavior? The FICO score measures the likelihood that you will make a payment 90 days late or worse (bankruptcy, for instance) in the next two years. It predicts that that will happen to 87% of those people with scores under 500. At 750 and up, it will happen to 3% of the population. At 800 and above, the system predicts that only 1% of the people will have a 90-day late payment or worse in the next 24 months.

What is a median? What is an average? Are they the same thing?

The median is a type of statistic, and a type of average. The median of a distribution is the middle number. If a distribution is

Behind the scenes: Credit scores in mortgage lending

Mortgage loans are bought and sold in the "secondary market" as "mortgage-backed securities" in blocks of millions of dollars. Here are some examples of descriptions of those pools:

• Weighted average FICO credit scores: 733, 726, 727
• "The weighted-average FICO score of the loans in the pool is 745, and approximately 74.88% and 2.70% of the mortgage loans possess FICO scores greater than or equal to 720 and less than 660, respectively."
• The weighted-average FICO score of the loans is 752.

The bottom line

Talk to a few people in lending and they'll tell you that a 723 FICO credit score is good enough. But, they're salesmen. They won't tell you that 723 is only the exact median (the middle score) of everybody who has a score. So, if that's only average, you might consider shooting a little higher. 13% of the scored U.S. population have an 800 FICO score or higher.

So, try for that. It's a great pickup line.

IMPORTANT RESOURCE: Fake-O - Fake-O - FICO

MORE NUMBERS: The Score Poor: 50 million. See the The FICO Score page, and 2006 News.