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A typical California resident has a FICO® credit score of 722, which is slightly higher than the national average credit score of 715. The state’s average VantageScore is also better than the U.S.: 712 vs. 705.

A good credit score could open more financial doors for you, such as accessing more competitive interest rates for loans. By understanding the average credit score in California, you can better see how your credit profile stacks up against others in your state and identify areas of improvements.

What Is a Credit Score?

Think of a credit score like a resume but for your credit behavior. This three-digit number ranges from 300 to 850 and is based on information gathered from your credit history. Lenders often use it to determine your future credit behavior, such as whether you’re more likely to pay loans on time.

In general, the higher your score, the more creditworthy you’ll likely appear to lenders — and the better your chances are to receive favorable rates and terms.

Recommended: What Is the Starting Credit Score?

What Is the Average Credit Score in California?

If you live in California and want to see how your credit score compares to fellow residents, it helps to look at two popular credit scoring models: FICO and VantageScore®.

As discussed, Californians have an average FICO Score of 722 and an average VantageScore of 712. These numbers are part of a larger positive trend in the state, according to the California Policy Lab, a research institute at the University of California. A 2024 analysis reveals that the average credit score in the state has been increasing steadily since 2013.

California Policy Lab also looked at how credit scores differed within the state based on a consumer’s location. As of December 2024, residents in the Bay area had the highest average credit score in the state, at 732. Meanwhile, people living in the San Joaquin Valley had the lowest score, at 688.

Scores also varied by age. At 743, Boomers (age 61-79) have the highest average score in California. The Greatest Generation (98+) had the lowest average credit score —663.

What Is the Average Credit Score in the U.S.?

As we mentioned above, Experian data shows the average FICO in the U.S. is 715 and the average VantageScore is 705. By comparison, the average FICO Score in California is 722 and the average VantageScore is 712.

What Is a Good Credit Score?

A “good” credit score depends on which scoring model you use. FICO considers a good score to fall between 670 and 730. A good VantageScore credit score is between 661 to 715. In general, those with a minimum credit score of 670 have a “good” credit score.

Factors Influencing the Average Credit Score

There are certain factors that affect your credit score, and all of them have to do with how you manage your credit accounts.

FICO and VantageScore consider the following when determining your score:

•   Payment history: Lenders want to know you’ll pay back what you owe in full and on time, so this factor ranks as one of the most influential factors that determine your credit score. If you need help making on-time payments, consider enlisting the help of a spending app.

•   Credit utilization/amounts owed: Credit utilization is the percentage of the available credit limit that you’re using. The higher the percentage, the more it could negatively affect your score.

•   Length of credit history: Having a longer credit history can offer scoring models more insight into how you use credit, though it’s not hugely influential when calculating a credit score.

•   Credit mix: Scoring models will take into account how well you manage different types of loans, such as a mortgage, credit cards, and personal loans.

•   New credit: When you apply for a new account, the lender will likely perform a hard inquiry, which can temporarily lower your credit score by a few points. Opening multiple new accounts in a short period of time could affect your score and may signal financial strain to lenders.

Why Do I Have More Than One Credit Score?

Every consumer has more than one credit score, and there are a few reasons for this. For starters, the information lenders provide to each of the three main credit reporting agencies — Equifax, Experian, and TransUnion — may vary slightly. A lender may choose to report data to one, two, or all three agencies, for example.

There are also various scoring models that a lender may use, including FICO and VantageScore, and each may weigh certain credit behaviors differently. One model might put greater weight on credit utilization or length of credit history, for instance.

Timing also plays a role. Generally, credit scores update every 30 to 45 days, and your score can change as new information becomes available.

Regardless of those factors, it’s important to understand what your credit score is so that you can use the information to build your credit and make progress toward your financial goals.

Recommended: FICO Score vs. Credit Score

Where Can I Check My Credit Scores?

Credit score monitoring is a smart thing for any consumer to do but can be particularly helpful if you’re getting ready to apply for a loan. You’ll not only see what information lenders can access, you can also use your score to gauge what loans you may qualify for.

The good news is, there are plenty of ways you can check your credit score without paying — whether you live in California or any other state. Banks often provide this information to their customers for free, as do credit card issuers. If you’re working with a credit counselor, they may be able to provide you with your score.

The Takeaway

The average credit score in California is 722 for FICO and 712 for VantageScore. Both scores are higher than the national average, and both are considered good. If you want to build your score, consider paying bills on time, keeping credit utilization low, and responsibly managing a mix of credit.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is a good credit score to buy a car?

There’s no minimum credit score required when you’re applying for a car loan. That said, the higher your score, the more likely you are to receive a lower interest rate and more favorable terms.

What is a good credit score to buy a house?

The minimum credit score you need for a mortgage will depend on the type of loan you’re pursuing. For example, conventional loans and VA loans typically require borrowers to have a credit score of at least 620, though some lenders prefer to see a minimum credit score of 640. FHA loans, on the other hand, may be within reach for home buyers who have a credit score as low as 500, though they’ll be required to come up with a 10% down payment.

What credit score do most Americans have?

According to Experian, the average credit score in the U.S. is 715, which is generally considered a good score.

How rare is a 740 credit score?

A credit score of 740 isn’t that rare. According to Experian, 28% of Americans have a credit score of 740 or higher.

How rare is an 800 credit score?

Experian data found that some 22% of Americans have a credit score of 800 or higher. So, an 800 credit score isn’t uncommon.

How common is a 700 credit score?

More than one in five Americans (21%) have a credit score that falls between 670 and 739, which is considered “good.”

photo credit: iStock/anyaberkut
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Investing in individual bonds can be complicated, but exchange-traded funds (ETFs) that invest in bonds — or bond ETFs — can provide a more straightforward way to invest in fixed-income securities. Investors may associate ETFs with stocks, thanks to the popular ETFs that track stock indices like the S&P 500. ETFs also happen to trade on stock exchanges, like the New York Stock Exchange.

Bond ETFs work similarly. Though the ETF holds bonds and not stocks, it trades on a stock exchange. Said another way, a bond ETF is a bundle of bonds that an investor can trade like a stock. Bond ETFs make it possible for investors to buy a diversified set of bonds, without the time and effort it would take to build a portfolio of individual bonds.

ETF 101: Reviewing the Basics

Before getting into the specifics of bond ETFs, it will be helpful to understand ETFs and bonds separately. Let’s begin with ETFs.

An investment fund provides a way to pool money with other investors so that money can then be spread across many different investments (sometimes referred to as a “basket” of investments).

For most retail investors, it would be too costly to individually purchase 500 individual stocks or 1,000 individual bonds. But such a thing becomes possible when doing it alongside thousands of other investors. Though different vehicles, mutual funds and ETFs provide investors with an incredible opportunity to diversify their investments.

For retail investors, investment funds come in two major varieties: mutual funds and exchange-traded funds. Mutual funds and ETFs are constructed differently — ETFs were built to trade on an exchange, as the name implies — but both can be useful tools in gaining broad diversification.

Whether investors will choose a mutual fund or ETF will likely depend on their preference, and context. For example, someone using a workplace retirement plan may only have access to mutual funds, so that’s what they use.

Someone who is investing independently may choose ETFs since ETFs tend to have lower fees than mutual funds.

Whether an investor is using a mutual fund or an ETF, what’s most important is what’s held inside that fund. Think of an ETF as a basket that holds an array of securities, like stocks or bonds.

Most ETFs will hold just one type of security — only stocks or only bonds, for example. A bond ETF could be broad, or it could contain a narrower sliver of the bond market, like corporate bonds, green bonds, or short-term treasury bonds.

What Is a Bond?

Effectively, a bond is a loan to an organization: i.e., a company, government, or other entity. Investors loan the entity their money, and then the entity pays interest on the amount of that loan.

Bonds are different from stocks, which offer investors the opportunity to buy shares of ownership in a company in a company or entity.

There are many types of bonds. Treasuries are loans to the U.S. government. Municipal bonds are loans to a state or local government. Companies sometimes issue bonds in order to raise money. These entities are borrowing money from investors and issuing IOUs in the form of bonds.

How Bonds Work

When investors buy a bond, they are agreeing to the rate of interest and other terms set by the bond. Because bonds pay a fixed rate of interest, bonds are sometimes referred to as fixed-income investments.

Bonds typically make interest payments, sometimes referred to as coupon payments, twice annually.

Example of a Bond

Let’s say an investor buys a Company X bond for $10,000 that pays a 4% rate of interest over 20 years. The bond earns $400 every year, earning the investor a total of $8,000 over the 20-year period. At the end of the period, the $10,000 “principal” investment is returned. As long as the investor holds the bond for the full 20 years, there should be no surprises.

Because bonds pay a fixed rate of return, their earnings potential is largely predictable. But there is limited upside on what can be earned on a bond. For this reason, bonds are considered to be a safer, less volatile complement to stock holdings, which have a higher potential for returns over time.

Types of Bonds

Bonds are issued by different entities and are often categorized by the issuer. There are four categories of bonds available to investors.

•   Treasury bonds: Bonds issued by the U.S. government.

•   Municipal bonds: Bonds issued by local governments or government agencies.

•   Corporate bonds: Bonds issued by a public corporation.

•   Mortgage and asset-backed bonds: Bonds that pass through the interest paid on a bundle of debts, such as a bundle of mortgages, student loans, car loans, or other financial assets.

There are also many subtypes within these broad categories.

When it comes to risk, the bond market comprises a wide range. Corporate, municipal, and asset-backed bonds are generally considered to be higher-risk than treasury bonds.

Whereas a business or even a municipal government could potentially “default” on a loan, it is highly unlikely that the U.S. government would go bankrupt. (As yet, the U.S. government has never defaulted on a treasury bond.)

Because they are considered low risk, U.S. treasury bonds typically pay less interest than the other bond types. This is an important trade-off to understand. Higher-risk investments should pay a higher rate of interest in order to compensate the investor for taking on that additional risk.

This is why it is possible to see bonds with high rates of interest issued by unstable governments or by highly speculative companies. These are often referred to simply as high-yield bonds or junk bonds.

Bonds can also vary by their maturity dates. It is possible to purchase bonds with a wide range of timelines, ranging from the very short (a few days) to the very long (30 years). Although it depends on the current state of interest rates, long-term bonds tend to pay more than short-term bonds. This should make intuitive sense; investors want to be compensated for locking their money up for longer periods.

Benefits of Bond ETFs

While bonds offer certain benefits to investors, including relatively low risk and predictable income, these instruments are complex. Owning and managing a portfolio of bonds requires experience and sophistication. This is where bond ETFs come in. In some ways, bond ETFs give retail investors easier access to the bond market.

Bond ETFs Can Be Purchased in Small Dollar Amounts

For some bonds, the starting price is $1,000. This can be prohibitive for small investors who don’t have $1,000 to start building their bond portfolio, let alone a diversified one.

Generally, ETFs are sold by the share, and the cost of one share varies by ETF. Some trading platforms allow for the purchase of partial shares, which allows investors to get started with as little as $1.

Bond ETFs Can Provide Diversification

It is possible to buy into a fund of hundreds or thousands of bonds using a bond ETF. This type of portfolio diversification would be otherwise impossible to achieve for small investors trying to build a bond portfolio on their own. ETFs make diversification a possibility, even at very small dollar amounts.

Bond ETFs are Typically Low-Cost

ETFs, by their nature, are low-cost. Because they are typically passive funds by style, the management fee embedded within the fund — called the expense ratio — is typically quite low. Compare this to an actively managed mutual fund of bonds, where the expense ratios can top 1%.

There’s another fee that investors will want to be aware of, called a trading cost or transaction fee. This is the cost of buying and selling ETFs (and stocks). These fees can be quite prohibitive for retail investors. Luckily, there are ways to buy ETFs without paying any trading or transaction fees.

Bond ETFs are Liquid

Individual bonds are not always easy to buy and sell. Said another way, they are not particularly liquid. Bonds do not trade on an open exchange, like stocks and ETFs. It is likely that an investor would need to involve a professional to broker the transaction.

ETFs, on the other hand, are very easy to sell. Most banks and trading platforms allow investors to do it themselves, online. This way, an investment can be sold quickly if needed.


💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

Downsides of Bond ETFs

Bond ETFs do have their downsides, however.

Bond ETFs reveal underlying price changes in the bonds, which some investors may find disconcerting. Because yes, it is possible for bonds, and a bond ETF, to lose value.

When holding an individual bond or a portfolio of bonds, an investor is not provided minute-by-minute updates of the market value of that investment. In this way, a bond is like a house. There is no ticker sitting above anyone’s house that tells them the value of that property at any given time.

This is not the case with a bond ETF, where price changes can be felt in near real time. It will be important that investors are prepared for this. It is generally not wise to make a decision about long-term investments based on recent price gyrations, not just with stocks but with bonds, too.

The Takeaway

The first step is to research bond ETFs, as there are many kinds. Bond ETFs can be broad and cover a wide sample of the bond market, or they can be narrower. For example, it is possible to buy a long-term treasury bond ETF or a bond ETF that only holds certain municipal bonds.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

FAQ

What is a bond ETF?

A bond ETF is an exchange-traded fund that invests in, or is composed of, bonds, rather than stocks or other types of securities.

What are some examples of types of bonds?

There are numerous types of bonds, and some examples include Treasury bonds (or T-bills), municipal bonds, corporate bonds, and mortgage or asset-backed bonds.

What are some potential advantages to bond ETFs?

Potential advantages of bond ETFs include the fact that they can be purchased in small dollar amounts, they can help diversify a portfolio, and are relatively liquid. That doesn’t mean that there aren’t drawbacks, however.