Credit score distribution and practical ranges statistics

February 23, 2010

For your consumption, FICO (the company) illustrates the FICO (the score) with its "National Distribution of FICO Scores" bar chart at myFICO.com.

Another orientation:

Equifax describes its version of the ubiquitous FICO score with a simpler distribution:

• 20% are above 780
• 20% are in the range of 745 - 780
• 20% are in the range of 690 - 745^[*]
• 20% are in the range of 620 - 690
• 20% are below 619

(*two segments cannot include 745, but nobody ever accused Equifax of accuracy)

One of the companies involved with the FICO score used to illustrate that breakdown with a bar that looked like this:

Combining charts for more information

In theory, using the information from those two tables, you could extrapolate that 7% have a score from 780 to 799 (and 5% have 600-619). Unfortunately, the two sets of statistics clash: The top 40% of the Equifax illustration ranges from 745 to 850, but the myFICO.com FICO credit score chart shows the top 40% spanning 750 to 850.

And before you get all logical, indignant and acrimonious about this apparent inconsistency in describing the score with a 74% market-share, remember that it is hard to ask the quartet to speak with one voice because they are too busy suing each other or getting sued by the federal government. The discrepancy could just be caused by the difference between the Equifax BEACON FICO score and some mythical score FICO concocted from the three (or two) bureaus data, collectively. Who knows?

Inconsistency aside, if the median FICO score is 723, then we could assume that the middle section of the second table above is split 690-722 and 723-745. 723 used to be cited as the median on the official company website, but that number has completely disappeared from myFICO.com. A query using the site's search box for, perhaps, the most basic of all FICO statistics returns "Sorry, we were unable to find a match for: 723". A remnant appears in the form of a graphic on the homepage. It shows 723 squarely in the middle the "VERY GOOD" segment of the FICO speedometer-style indicator. Because of the missing statistic, danger— in the form of blowhards' misinformation— lurks.

At one point, the distribution changed so that more were included in the top tier, 800-850. It was 11%, and then was 13%. The next lower level changed from 29 to 27%. If you're Equifax, you think that only 1% have an 800+.

Equifax and the other two

The Wizard seems to have a stronger relationship with Equitable-Facts than the other two Blind Mice. But, when USA TODAY stated that Equifax is "the only bureau that sells FICO scores to consumers," creditscoring.com's author pointed out the error to the reporter. You can still see the uncorrected page in the MONEY section. To see the correction, you would have to be reading USA TODAY's website TECH section (where the word "fallow" is used to describe the TransUnion FICO website). It's not like Gannett doesn't know how to make corrections that make sense like other newspapers. They just don't like being told what to do.

On TransUnionCS.com, TransUnion illustrates its FICO score with a one-axis continuum cumulative distribution table (see delinquency rates on the same page). It shows 700 as the 40th percentile and 750 as the 60th— again, close to, but not exactly the same as the myFICO chart.

Lastly, ever the oddball, Experian does not provide FICO scores to consumers. Instead, it schleps VantageScore (lender market share 5.7%) and PLUS (lender market share 0%). In an unbelievable coincidence, the PLUS score median is one point off of the previously reported FICO median (724 vs. 723)! Here's 5.7% of the attention for VantageScore's distribution.

Labels

Dumbing things down even further, here's FICO again making a value judgment based on scores with these monikers:

• GREAT
• VERY GOOD
• GOOD
• NOT GOOD
• BAD

But the score company does not define the limits of those categories.

The FICO company does, however, say that a 663 FICO "score is near the average score of U.S. consumers, and most lenders consider this a good score."

But, does that milqtoast discription mean that it is above or below average?

FICO says, "Average score is somewhere in the mid 600s," but also says, "707 is below the average."

Of course, It is mathematically impossible for the average to be above 707 and in the mid 600s, too. And that's another story.

Credit score wonks section

January 15, 2010. Federal Register, Fair Credit Reporting Risk-Based Pricing Regulations; Final Rule. Search for the word distribution, and be sure not be confused by the presumably fictitious credit score distribution chart ranging from 0 to 600 (federalreserve.gov/newse...).

December 22, 2009. "16 C.F.R. Part 640: Duties of Creditors Regarding Risk-Based Pricing; and 16 C.F.R. Part 698: New Appendix B Containing Model Forms For Risk-Based Pricing and Credit Score Disclosure Exception Notices: Final Rules Approved By the Federal Trade Commission, In Conjunction With Final Rules Approved By the Board of Governors of the Federal Reserve System"

May 8, 2008. 16 C.F.R. Part 640: Fair Credit Reporting Risk-Based Pricing Regulations: Proposed Rules To Implement the Risk-Based Pricing Provisions of Section 311 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act): Notice of Proposed Rulemaking Issued By the Board of Governors of the Federal Reserve System and the Federal Trade Commission