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10 States With The Best And Worst Credit Scores – Forbes Advisor

10 States With The Best And Worst Credit Scores
Written by Publishing Team

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Your credit score is a three-digit number based on the information listed on your credit report. When you apply for any type of new credit account such as a loan, the lender will usually review your credit score among other factors to determine your eligibility, loan terms and interest rate.

The most common credit scoring models — VantageScore and FICO — range from 300 to 850. Based on the July 2021 VantageScore report, the state with the highest average credit score was Minnesota (724); Mississippi had the lowest average score (662).

We’ll discuss the 10 states with the highest and lowest credit scores and cover tips on how to boost your credit score.

10 countries with the best credit scores

High credit scores often represent a positive payment history and low credit utilization – a comparison of your total credit to your available credit limit. These two factors are usually associated with higher levels of income, allowing people to take on their debt obligations and pay on time.

For example, the states with the highest credit scores had a median income that was higher than the national average: the median income for all 10 states with the best credit scores was $69,570 compared to the national average of $61,937 As of 2018, according to census data. . Only two of the 10 states—South Dakota and Vermont—had a median income that was below the national average.

Additionally, the average mortgage delinquency rate for all 10 states was below the national average as of March 2021, according to data from the National Mortgage Database. The average rate in the top ten states was 0.57% while the national default rate was 0.80%.

Here are the 10 states with the best credit scores, as of July 2021, according to VantageScore.

1. Minnesota – 724

Since July 2020, Minnesota has the highest average credit score in America. The state’s median income was $70,315 in 2018, according to census data, and the average mortgage late rate was 0.50% below the national average, according to data from the National Mortgage Database.

2. Vermont – 719

Although a median income of $60,782, according to census data, which was lower than the national average in 2018, Vermont had one of the highest average credit scores.

3. New Hampshire – 719

New Hampshire shares the same mortgage delinquency rate as the national average of 0.80%, according to data from the National Mortgage Database. However, the state had a delinquency rate for auto loans that was lower than the national average, according to Urban Institute credit data for December 2020.

4. Massachusetts – 718

Massachusetts has the fourth highest credit score. Its residents had delinquency rates for student loans, credit cards and auto loans that were all below the national average, according to Urban Institute credit data.

5. Washington – 716

Washington is another state with low delinquency rates (0.40%), according to the National Mortgage Database, and high average incomes ($74,073), according to census data. However, residents had a higher level of medical debt in the groups, averaging $1,846, compared to the national average of $1,835, according to Urban Institute credit data.

6. Hawaii – 716

With a median income of $80,212, according to census data, Hawaii has the highest income of all states with the best credit scores. The state’s mortgage delinquency rate was 0.40%, half the national average, according to data from the National Mortgage Database.

7. South Dakota – 713

Although South Dakota had a median income of $56,274 in 2018, according to census data, its residents do a good job of managing debt. The mortgage delinquency rate was 0.60% for the state — 0.20% lower than the national average — according to data from the National Mortgage Database.

8. Oregon – 712

Oregon is another state that has low rates of delinquency. For example, the mortgage delinquency rate is 0.40% compared to the national delinquency rate of 0.80%, according to data from the National Mortgage Database.

9. North Dakota – 712

North Dakota residents tend to manage debt well. The delinquency rate for student loans, auto loans and medical debt was lower than the national average, according to Urban Institute credit data.

10. Colorado – 711

Colorado has one of the highest median incomes ($71,953), according to census data, and ranked 10th among the states with the best credit scores.

10 countries with the worst credit scores

The 10 states with the lowest credit scores had a median income of $50,850, according to census data, which was $11,087 less than the national median income in 2018. Additionally, the median was The state mortgage delinquency rate is 1.09%, compared to a national average of 0.80%, according to data from the National Mortgage Database.

1. Mississippi – 662

Mississippi had the lowest credit score in America since July 2020. Of the 10 states with worst credit scores, Mississippi had the second lowest median income ($44,717), according to census data, and the highest mortgage delinquency ( 1.50%) according to data from the National Mortgage Database.

2- Louisiana – 667

Louisiana has the second worst credit score. Among the 10 states with the lowest credit scores, it had the fourth-lowest median income ($47,905, according to census data. In addition, the mortgage delinquency rate was 1.3%, half a percent higher than the national average). , according to the National Mortgage Database.

3. Alabama – 670

Alabama had the third worst credit score. The median income was well below the national average of $49,861, according to census data. The mortgage delinquency rate was 1.30% — 0.50% higher than the national mortgage delinquency rate — according to data from the National Mortgage Database.

4. Arkansas – 671

Arkansas, another southern state with a lower median income of $47,062, according to census data, had one of the worst credit scores. Delinquency rates for mortgages, auto loans and credit cards were above the respective national averages, according to the National Mortgage Database and Urban Institute credit data.

5. Oklahoma – 671

The percentage of Oklahoma residents who have group debt is 37% compared to the national average of 29%, according to Urban Institute credit data.

6- Texas – 673

Although Texas had a median income of $60,629, according to census data, that was close to the national median income, it had one of the lowest average credit scores. One reason for this may be that 23% of its residents have medical debt in groups compared to the national average of 15%, according to Urban Institute credit data.

7- Georgia – 675

Georgia’s median income was $58,756 — the second-highest for states with the worst credit scores — according to census data. The percentage of Georgia residents with debt in groups was 37% compared to the national average of 29%, according to Urban Institute credit data.

8- West Virginia – 675

West Virginia’s mortgage delinquency rate is 1.60% — the highest of the worst-scored states — according to National Mortgage Database data. Also, 27% of West Virginia residents had medical debts in groups, according to Urban Institute credit data.

9- Kentucky – 676

The mortgage delinquency rate in Kentucky was 0.20% higher than the national average, according to data from the National Mortgage Database. However, Kentuckians have done a better job of avoiding credit card delinquency. The average amount of delinquent credit card debt was $483 while the national average was $589, according to Urban Institute credit data.

10. South Carolina – 676

A large proportion of South Carolina residents — 40% of them have group debts compared to the national average of 29%, according to Urban Institute credit data.

methodology

The above lists were created based on the average VantageScores credit score by state report for July 2021. To create the rankings, we sorted the credit scores by state from lowest to highest.

3 ways to improve your credit score

No matter what state you live in, you can build and maintain an above-average credit score. Here are three actions you can take.

1. Pay all your bills on time

The most important habit to adopt when building credit is timely payments – your payment history accounts for 35% of your FICO score. Paying off your debts on time adds a positive payment history to your credit reports, which can boost your credit score. However, if any of your bills are overdue by 30 days, the creditor can report the three major credit bureaus – Equifax, Experian or TransUnion.

Once a late payment is reported, it can cause serious damage to your credit. It can remain on your credit report for up to seven years, but its effect diminishes over time.

2. Keep your credit utilization rate low

Another important factor is your credit utilization ratio – the amount of debt you owe against the credit you have available. It represents 30% of your FICO score. If you use most of your credit limit, lenders may see you as a riskier borrower and your score could drop.

To avoid this, do your best to keep this percentage below 30%.

3. Review your credit reports

A recent study by Consumer Reports found that when 6,000 consumers checked their credit reports, 2,040 (34%) of the reports contained at least one error. If your credit report contains inaccurate negative information, it can cause your credit score to drop. To catch and fix any errors, you should check your credit reports at least once a year.

Usually, you can check your credit reports with all three credit bureaus for free once a year by visiting AnnualCreditReport.com. However, due to Covid-19, you can access your free weekly reports until April 20, 2022. If you find any errors in your credit report, file a dispute by phone, mail, or online with each credit bureau that lists them.

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Although the average credit score varies by state, this does not affect your individual credit score. To improve your chances of getting and maintaining excellent credit, take some of the steps listed above. While you may not see immediate results, adopting good credit-building habits can help you save thousands of dollars over the course of your life.

Raise your FICO® score instantly with Experian Boost™

Experian can help raise your FICO® score based on paying bills such as your phone, utilities, and popular streaming services. Results may vary. See the website for more details.

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