What is the Average Credit Score by State?

Credit scores are more than just numbers—they represent a person’s financial health and responsibility. These scores impact various aspects of life, from getting approved for a loan to securing the best interest rates. Interestingly, credit scores vary across states due to differences in income, cost of living, and financial habits. As of 2023, the national average FICO® Score in the U.S. is 715. But how does your state stack up? Let’s dive into the average credit score by state and what it means for you.

Top States with the Highest Average Credit Scores

1. Minnesota: 742
2. Wisconsin: 737
3. Vermont: 737
4. New Hampshire: 736
5. Washington: 735

Residents in these states tend to manage their finances well, keeping debt low and paying their bills on time. Economic stability and higher median incomes contribute to these high scores.

States with the Lowest Average Credit Scores

1. Mississippi: 680
2. Louisiana: 690
3. Alabama: 692
4. Texas: 695
5. Georgia: 695

Lower credit scores in these states are often linked to economic challenges, higher levels of debt, and lower average incomes. However, even in states with lower averages, individuals can take steps to improve their scores.

Average Credit Scores by Region

• West Coast (e.g., California): Higher-than-average scores, with California at 722.
• Midwest (e.g., Iowa, Nebraska): Some of the highest averages, such as Minnesota (742) and North Dakota (733).
• South (e.g., Florida, Georgia): Generally lower scores, like Mississippi (680) and Georgia (695).
• Northeast (e.g., Massachusetts, Vermont): Consistently strong scores, with Vermont (737) leading the region.

What Influences Credit Scores by State?

Several factors contribute to the variation in credit scores across states:

1. Income Levels: States with higher average incomes often see higher credit scores.
2. Cost of Living: High living costs can increase reliance on credit, potentially lowering scores.
3. Debt Management: States with higher debt-to-income ratios often have lower scores.
4. Financial Education: States with better access to financial literacy programs typically report higher scores.

Why Your Credit Score Matters

Your credit score impacts:

• Loan Approvals: Higher scores mean easier approval for loans and credit cards.
• Interest Rates: Good credit leads to lower interest rates on loans and mortgages.
• Job Applications: Some employers check credit scores as part of the hiring process.
• Insurance Rates: Better scores can result in lower premiums.

How to Improve Your Credit Score

Regardless of where you live, improving your credit score is possible with these steps:

1. Pay Bills on Time: Payment history makes up 35% of your credit score.
2. Reduce Debt: Lower your credit utilization ratio to improve your score.
3. Avoid New Credit Applications: Too many inquiries can hurt your score.
4. Monitor Your Credit Report: Regularly check for errors or signs of fraud.

Final Thoughts

Understanding the average credit score in your state provides context, but it doesn’t define your personal financial journey. By adopting good credit habits, you can improve your score no matter where you live.

Want to learn more about credit scores or take control of your financial future? Stay tuned for more tips on managing and improving your credit.