2023’s best and worst credit scores by state

2023's best and worst credit scores by state

Understanding Credit Scores by State: Insights and Trends

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The Quirks and Variety of Credit Scores

Credit scores are an essential aspect of personal finance, shaping our financial opportunities and decisions. In the United States, the average FICO credit score for 2022 stood at a respectable 714, while the average VantageScore credit score was slightly lower at 702. However, these average scores only tell part of the story.

A myriad of factors influences credit scores, including age, income, immigration status, and even race. Moreover, where you live can greatly impact your credit score. For instance, individuals residing in Minnesota boast the highest average FICO credit score of 742, whereas Mississippians have an average FICO score of 680, the lowest in the nation.

A Tale of 10 States with Stellar Credit Scores

Based on data gathered by Experian, here are the 10 states with the highest average credit scores in 2022:

• Average credit score by age, state, and year.
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It’s worth noting that these states consistently maintain their high credit scores from year to year.

10 States Chasing After Higher Credit Scores

While credit scores have generally improved over the past few decades, some states still struggle to catch up to the national average. Here are the 10 states with the lowest average credit scores in 2022:

A common geographical pattern emerges as eight out of the ten states with the lowest credit scores can be found in the southern region, according to the US Census Bureau’s classification. However, it’s worth noting that even in the states with the lowest credit scores, residents still maintain credit scores above the “prime” threshold of 660.

Interestingly, lower credit scores do not necessarily correlate with higher levels of debt. In fact, Mississippi, the state with the lowest average credit score, also possesses the lowest average credit card debt and the second-lowest total debt average among the 10 states on this list.

Additionally, the 10 states with the lowest average VantageScore credit scores exhibit a similar trend, with a predominance of southern states.

Earning a Spot in Credit Score Categories

Credit scores fall into five risk categories based on their corresponding ranges, according to FICO:

Remarkably, 49 out of the 50 states have an average credit score falling into the “good” category, with Minnesota being the exception as its residents maintain an average score of 742, placing them in the “very good” category.

Steps to Elevate Your Credit Score

Improving your credit score entails building positive credit information alongside existing negative information, rather than merely eliminating negative aspects. Here are some strategies to consider:

1. Timely Payments: Prioritize making payments on your existing lines of credit promptly. If minimum payments prove challenging, seeking guidance from a credit counselor and enrolling in a debt management plan could help negotiate lower interest rates or reduced minimum payments.

2. Credit-Building Products: Explore credit builder loans, which add payment history to your credit reports without requiring a credit check. Additionally, rent reporting services enable you to build payment history by reporting your rent payments to credit bureaus.

3. Credit Monitoring: Keeping tabs on your credit score is vital. Utilize credit monitoring services to regularly check your credit score, with some services even available for free.

It’s important to note that rent reporting affects FICO 9 and VantageScore 3.0 credit scores but has no impact on FICO 8 scores.

By consistently implementing these strategies, you can enhance your creditworthiness and secure better financial opportunities.

FAQ: Average Credit Scores by State

• Q: How are credit scores categorized?

  A: Credit scores range from 300 to 850 and are categorized into five risk categories: Exceptional, Very Good, Good, Fair, and Poor.

• Q: Which states have the highest average credit scores?

  A: The 10 states with the highest average credit scores in 2022 are Minnesota, North Dakota, Vermont, South Dakota, Massachusetts, New Hampshire, Washington, Wisconsin, Iowa, and Nebraska.

• Q: Which states have the lowest average credit scores?

  A: The 10 states with the lowest average credit scores in 2022 are Mississippi, Louisiana, Alabama, Texas, Georgia, South Carolina, Nevada, Florida, Arkansas, and Oklahoma.

In conclusion, credit scores play a crucial role in financial well-being. Although average credit scores vary among states, it’s important to focus on improving personal credit scores by adopting sound financial practices. By doing so, individuals can enhance their financial opportunities and achieve long-term financial stability.

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