Where Americans have the highest and lowest credit scores

Where you live can affect your credit score.

With Minnesota’s low poverty rate and high employment, its residents have an average credit score of 724, well above that of even wealthier states like California and New Jersey, according to a recent report by WalletHub based on TransUnion data.

In fact, Minnesota residents have the highest average credit score of any state nationwide, followed by New Hampshire, Vermont, and Massachusetts, WalletHub found.

Meanwhile, despite the relatively low cost of living, Mississippi residents shared the lowest credit score in the country at 662, along with Louisiana, Alabama and Arkansas.

According to a separate report from FICO, the developer of one of the most widely used scores by lenders, the national median credit score is at an all-time high of 716, flat from last year. FICO scores range from 300 to 850.

However, according to Ethan Dornhelm, FICO’s vice president of scores and predictive analytics, this is the first time since the Great Recession that scores have not improved from year to year.

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“We are leveling back to pre-pandemic norms, which in and of itself is not a red flag,” Dornhelm said, despite “this slight deterioration in debt levels.”

“What we’re keeping an eye on is whether there’s further deterioration,” he added.

With prices rising across the board, Americans are actually getting even more into debt.

And yet, despite the rise in the cost of living, credit scores have held steady, causing credit card balances to rise 15%, along with an increase in missed payments.

In April 2022, the average credit card utilization was just over 31%, up from 29.6% a year earlier.

Your utilization, the ratio of debt to total credit, is one of many factors that can affect your score. Credit experts generally advise borrowers to keep revolving debt below 30% of their available credit to limit the impact that high balances can have.

“We are closely monitoring what the next six months will bring,” said Dornhelm.

Many factors are at play, he added, including inflation, jobs and housing, and the withdrawal of government stimulus programs from the Covid-era, including the suspension of payments on most federal student loans until December 31.

In general, the higher your credit rating, the better you are at lending. You are more likely to be approved and if you are approved you may qualify for a lower interest rate.

A good score is generally above 670, a very good score is above 740, and anything above 800 is considered exceptional.

An average score of 716 on FICO measurements means most lenders rate your credit as “good” and are more likely to offer lower interest rates.

During the housing crisis more than a decade ago, when there was a sharp rise in foreclosures, the average nationwide credit score bottomed at 686. They ticked steadily higher up until the pandemic, when government stimulus programs and a surge in household savings helped propel the scores to an all-time high of 713.

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