This map shows where Americans have the highest — and lowest — credit scores

Where you live may have an impact on your credit rating. With Minnesota’s low poverty rate and high employment, its residents have a credit score of 724, on average, well above those of even wealthier states, such as California and New Jersey, according to a recent report by WalletHub based on TransUnion data. In fact, residents of Minnesota have the highest average credit score of any state nationwide, followed by New Hampshire, Vermont and Massachusetts, WalletHub found. Meanwhile, Mississippi residents had the lowest credit score across the country — at 662 — along with Louisiana, Alabama and Arkansas, despite the relatively low cost of living. The national average credit score sits at an all-time high of 716, unchanged from a year ago, according to a separate report from FICO, developer of one of the scores most widely used by lenders. FICO scores range from 300 to 850. However, this marks the first time since the Great Recession that scores did not improve year over year, according to Ethan Dornhelm, FICO’s vice president of scores and predictive analytics. “We are leveling off back to pre-pandemic norms which is, in and of itself, not a red flag,” Dornhelm said, despite “this slight deterioration of debt levels.” “What we’re keeping an eye on is if there’s continued deterioration,” he added.

How debt impacts credit scores

As prices rise across the board, Americans are, in fact, falling deeper in debt. And yet, credit scores have held steady despite the spike in the cost of living, which has caused credit card balances to jump 15% along with an uptick in missed payments. As of April 2022, the average credit card utilization was just over 31%, up from 29.6% a year earlier. Your utilization rate, the ratio of debt to total credit, is one of many factors that can influence your score. Credit experts generally advise borrowers to keep revolving debt below 30% of their available credit to limit the effect that high balances can have. “We are closely monitoring what the next six months will bring,” Dornhelm said. There are a lot of factors at play, he added, including inflation, the jobs market and housing, along with the pullback of Covid-era government stimulus programs, including the payment pause on most federal student loans through Dec. 31.

What is a ‘good’ credit score?

Generally speaking, the higher your credit score, the better off you are when it comes to getting a loan. You’re more likely to be approved, and if you’re approved you can qualify for a lower interest rate. A good score generally is above 670, a very good score is over 740 and anything above 800 is considered exceptional. An average score of 716 by FICO measurements means most lenders will consider your creditworthiness “good” and are more likely to extend lower rates. Average nationwide credit scores bottomed out at 686 during the housing crisis more than a decade ago, when there was a sharp increase in foreclosures. They steadily ticked higher until the pandemic, when government stimulus programs and a spike in household saving helped scores jump to a historical high of 713.