Earning a high credit score isn’t just a matter of bragging rights. Because it’s a number that tells creditors how to assess your ability to pay them back, the higher your score, the easier it is to rent an apartment, get a loan or qualify for a credit card.
Plus, higher-scoring borrowers are likelier to receive lower interest rates on car loans, mortgages and other financing.
Americans from some states are faring better than others on this front. The best credit in America belongs to Minnesotans, with an average score of 724, according to a recent report by WalletHub, based on data from TransUnion.
That puts the average resident of Minnesota in good but not terrific shape. Credit scores generally run from 300 to 850, with scores over 750 considered “excellent.” So even if you find your state among the top scorers in the country, if you’re like your average peer, you may have a little work to do.
Here are the 10 states with the highest average credit scores, as well as where to find out how you stack up.
- Minnesota: 724
- New Hampshire: 719
- Vermont: 718
- Massachusetts: 716
- South Dakota: 715
- North Dakota: 715
- Hawaii: 715
- Washington: 714
- Oregon: 712
- Nebraska: 712
How does your score measure up?
While a higher score is better than a lower one, there’s no need to strive for perfection, said Ted Rossman, senior industry analyst at Bankrate.com.
“In the eyes of a lender, there’s really no difference between 750 and 850,” he said. “Once you hit the mid-700s, you’re going to get the best terms on most products.”
But once you start going lower from there, he said, small changes in your credit score begin to matter more.
“Below 740, every 20 points or so makes a big difference,” Rossman said. “Once you get between 660 and 680, you’re getting to the cutoff for subprime credit. Below that, you’re much less likely to be approved.”
Still, if you’re in line with the average Minnesotan or the average Nebraskan, you’re likely doing OK. “If you’re in the low 700s, you’re still getting excellent deals and offers,” said credit expert Gerri Detweiler. “If you’re in the 600s, getting over that 700 threshold is a good goal to aim for.”
Don’t know your credit score offhand? Luckily, there are plenty of places to check. “Often your credit card company is a good place to start,” said Detweiler. “Most of them offer some form of free credit monitoring.”
You’ll likely also be able to find your score through your bank, credit union, auto lender or by using a reputable site such as CreditKarma or Experian’s FreeCreditScore.com.
If you find your credit score is higher than the average Minnesota resident, congrats! Take steps to keep it up this holiday season by avoiding racking up big balances on your credit cards or making late payments.
However, if you’re in a temporary financial bind, that’s OK. “It’s never ideal to pay interest. But if you’re experiencing a short period of tighter cashflow, then just making on-time minimum payments on your cards will help you avoid damage to your credit,” Detweiler said.