Average Credit Score by State

How Credit Scores Vary from State to State

Do you know your credit score? A credit score is an evaluation of how good a lending risk you are to companies that give loans. The higher your score, the safer it is likely to be to extend you credit, so the more likely you are to receive a good loan at a favorable interest rate. Whether you know your score or not, you may be curious about the average credit score by state.

Average Credit Score by State -- Examples

At this time, the national average credit score is around 680-690. That’s a fairly decent score, although not a top score. If you’re above the national average, you’re doing great, and there’s a good chance you’re in one of the highest borrowing categories. If you’re below this average though, it’s not the end of the world. You can still get a loan, often at reasonable terms, and you can always take steps to improve your credit rating. Remember, these scores are not set in stone.

Top Credit Scores by State

Although there is plenty of intrastate variation, the state with the best average credit score is Minnesota, followed closely by the Dakotas. These areas all have scores around 720, which is considered a good barometer for the entry point to the best credit risk category. There are a number of reasons why this may be the case, including the fact that the cost of living and cost of land is relatively low in these areas. Other states boasting impressive credit score averages include Vermont, Montana, Iowa, New Hampshire, Wisconsin, Massachusetts, Nebraska and Connecticut, all of which have average scores over 710.

Bottom Credit Scores by State

The state with the worst average credit score is Nevada, at around 670. It’s tempting to attribute this to the high amount of gambling in the state, but there are likely many other factors at work as well. Other states with similarly poor credit rating averages include Texas, Louisiana, Mississippi and South Carolina. Many people in these states may have been victimized by the subprime mortgage loan crisis, in which people who could not otherwise get loans were offered loans at incredibly high interest rates. These loans also could have had impossibly expensive balloon payments built in, creating a situation where it would be impossible to repay.

It’s important to note that even the states with the worst averages show credit scores that are still an acceptable risk. What does this mean? It could mean that as difficult as many credit situations may be at one point or another, it is possible to recover.

Why Are Credit Scores Good to Know?

While it may be interesting to know the average credit score by state, the most important credit rating score to know is your own. A credit score is a number derived by the three credit reporting bureaus, TransUnion, Experian and Equifax, that gives potential lenders a snapshot of your potential risk. Each of these credit bureaus operates independently, so you may not see the exact same score from all three. To get a complete picture, it is important to get credit reports from each credit bureau.

Remember that although you can get a complimentary credit report from any of these bureaus once a year, this does not come with the credit score. To get your score, you will have to pay extra. However, CreditReport.com provides the score for free when you register for their credit reporting service.

While moving to another state will not raise or lower your credit score, there are plenty of other things you can do to raise your score. You can reduce the number of credit cards you own, make sure that all your loan bills are paid on time, pay down balances so that you have a significant amount of unused credit, and you can even ask to have your credit limits raised but not use the additional borrowing power. Most of these things aren’t easy, but with some willpower and creative budgeting, they usually can be done.

It’ll be much easier to do some of these things and raise your credit score if you have access to regular updates of your credit report. You can see if the actions that you are taking are working to raise your credit score, and if they aren’t, you can figure out what tactics you need to change to get back on the right track. Whether you live in Missouri or Massachusetts, having a strong credit score is always about knowledge and action.