If the U.S. Had a Credit Score, What Would It Be?

Credit scores are among the most important financial indicators used to determine someone’s worthiness as a borrower. We’re told to keep our credit score as high as possible so we can enjoy financial products like the best personal loans and credit cards, but half of Americans don’t check their credit score at all. 

Given its importance, we thought it might be interesting to find out what the United States’ credit score would be when held to the same standards. 

1. Length of credit history

Seven years is the general standard for establishing a good credit score — which is good news for the United States.  The first time the country went into debt was 1790, when it took on $75 million. This means the U.S. credit score will positively impact such a long credit history that shows a good set of repayments for over 200 years. 

2. Payment history

While the U.S. has stayed in debt for nearly all of its history, it always makes payments towards the balance. In 2019, the government projected it would pay out $593.1 billion in interest payments — which proved that the U.S. had paid down its balances over the length of its credit history, which can allow the country to borrow more in the future. 

[ Read: The Best Personal Loans for Good Credit of 2020 ]

The only time the U.S. has been out of debt was 1835, under President Andrew Jackson. While being free of debt sounds ideal, it turned out to be a bad move for the economy. Selling off federal lands and dismantling the national bank led to the Panic of 1837 — a financial crisis that ultimately caused the U.S. to start taking on debt again.

So while the amount of debt the U.S. has is concerning, the country doesn’t miss its payments, giving its credit score a boost.

3. Debt

As of October 1, 2020, the national debt level was just over $27 trillion, which is roughly a $4.3 trillion increase from 2019. That’s a considerable change. But to be fair, the coronavirus pandemic did push the government into taking on more debt than intended.

Still, in September 2020, U.S. debt levels were equal to 98% of the gross domestic product — this hasn’t happened since World War II. There are no signs of stopping the escalating debt, which is really going to hurt the credit score — likely more than any other factor on the list. 

4. New credit inquiries

When you apply for new lines of credit, lenders will do a hard credit pull. A hard inquiry will decrease your credit score, but generally only by a few points. But multiple credit inquiries will hit your credit even more. Inquires will remain on your credit report for two years, even though FICO scores only look at inquiries from the previous year. 

[ Read: Is It Good to Have Multiple Credit Cards, or Will It Hurt My Credit Score? ]

For decades now, the U.S. has been borrowing increasingly more money. For the sake of this story, let’s say that each time the U.S. took on new debt, a hard credit inquiry pull performed. If it took on multiple forms of debt at once, its score would drop even more. Given the amount of debt the U.S. continues to take out, this metric would really drag down its score.

5. Different creditors

The average American owes money to at least four different entities. The U.S. also owes money to several other countries and organizations (and it’s a lot more than four.) This is another strike that will drag down its credit report.

Foreign and international entities own 30% of the national debt, with China and Japan leading the board. Domestic and non-federal entities (35%) and the federal government funds (26%) each own a considerable part as well. If the U.S. had a phone line, it would be going off every day with calls from creditors. 

The U.S. credit score would be around 625

“If we used a traditional FICO scoring, the US credit score would most likely be somewhere around 625-650,” says Adem Selita, CEO of The Debt Relief Co. 

You might be wondering why it isn’t lowered given the $27 trillion debt looming in a corner. All the factors we went through will weigh into the credit score at different levels. So while debt is a huge chunk, it isn’t the only factor that impacts the score. 

“Utilization (30% of score) is maxed out, so this is a big negative. Payment history (35%) is flawless so this is a big positive. The length of time credit has been established (15%), diversity of credit (10%) are also all big positives. New credit (10%) is negative since we are constantly issuing new debt,” Selita adds.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Image Credit: smartboy10/Getty Images

Taylor Leamey

Personal Finance Reporter

Taylor Leamey is a personal finance reporter at The Simple Dollar who specializes in personal loans, student loans, mortgages, renters, and financial policy. Her reporting has also been featured at CreditCards.com, Interest.com, Reviews.com, MyMove.com, and elsewhere.

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  • Andrea Perez
    Andrea Perez
    Personal Finance Editor

    Andrea Perez is an editor at The Simple Dollar who leads our news and opinion coverage. She specializes in financial policy, banking, and investing.