Contest ratings gauge how well you are able to solve different types of DSA problems within the given timeframe (4 problems per 90 minutes). Although contest ratings vary (especially a lot) depend on performance, we all start on the 1500 rating assuming no previous participation with LeetCode contests. Including ALL the participants, I can see that I am in the top 18.87% of performance with a contest rating of 1627. However, the performance percentile is VERY different when we only include frequent participants (those who participate in 20 contests or more). In a pool of regular participants, I am only in the top 68%... The reason for this is that many first-time participants in LeetCode contests didn't participate again due to poor performance. Out of 421,265 accounts that have ever participated, it is safe to say that 44,565 (10.58%) accounts are frequent participants.

To think that a 1500 contest rating is slightly above average (top 42.57%), it is misleading since frequent participants often have a considerably higher rating. In fact, a 1500 contest rating as a frequent participant is considered significantly below average (top 84.91%). If you want an average rating, you will have to get a contest rating as much as 1750. (The one-time participants in contests with their low 1400-ish ratings significantly influences the average contest ratings in a way)

Anyways, here are some contest ratings and what they mean in my opinion:
1200 (0.83%) - You are only able to solve very few problems in the "easy" level. Many CS fundamentals appear to be missing. You might be familar with basic for-loops and if statements, but have little to no understanding of DSA.
1400 (6.66%) - You can solve a handful of easy problems, as well as an occasional medium one. For the problems you are able to solve, you often use brute-force. Understanding of DSA remains basic such as the manipulation of arrays and strings.
1500 (15.09%) - This is where everyone starts with, assuming no contest participation. As a regular participant, you can solve many easy problems as well as few mediums. You can solve these problems using the brute-force method, but often have difficulty optimizing the solution.
1600 (27.35%) - You can solve most easy problems at ease as well as some mediums. You have at least a basic understanding of DSA as well as few other tools to help you solve such problems. However, your DSA toolbox is relatively smaller compared to other frequent participants.
1750 (49.98%) - You can solve easy problems as well as big chunk of medium ones. For some problems, you may think of multiple approaches, including the optimal ones. You have an decently-sized DSA toolbox that helps you identify what you should use for many problems you can solve.
1850 (63.77%) - It is not uncommon for frequent participants to get this far with their shiny Knight badge! You can solve many medium LeetCode problems as well as a few hard ones. Since hard problems often involve graphs, DP, trees, and other hard algorithms, you will need to be accustomed to harder problems (or solve nearly all mediums) to reach this rating . At this point, you are mostly interview ready!
2000 (79.98%) - You can solve most LeetCode problems, even some harder ones. You can write up with multiple solutions, including the optimal ones. Your DSA toolbox is significantly larger compared to others that your understanding of DSA is advanced at this point.
2200 (91.19%) - If you get this far, you will earn the Guardian badge. You can solve most LeetCode problems including many hard ones due to your advanced understanding of DSA.
2500 (97.63%) - You have expert-level understanding of DSA, and can solve nearly any LeetCode problem you can think of. While it is extremely impressive to have this rating, interviewers will also gauge your communication skills as well. If you want another challenge, then practice thinking out loud while solving LeetCode problems!

I know that the percentages I put next to contest ratings may be interpreted as "comparing to others", however, it doesn't have to be that way. Back in July, I had a contest rating as low as 1350 (4.09%), but I don't let that stop me from participating. The way to improve yourself is to take small steps towards your contest rating improvement. For instance, you have a 1400 contest rating, and you want to be a Guardian, right? It doesn't take just one contest or two to do that. It will take many, many contests to see significant results. So if you want to see improvement from your 1400 rating, why not try reaching for a 1500 contest rating? Or if you already have a 1500 contest rating, try reaching for 1600.

By the way, here is the contest rating graph that is generated from the clist.by website: