The Top Worst States for Credit Scores
Having a high credit score is extremely important in today’s financial world and is used by dozens of industries to determine whether you’re a risk to them or not.
Credit scores are checked for hiring, renting, buying, and dating. We all understand how important credit scores are, and while where you live isn’t necessarily going to affect your credit score, we’ve decided to put together a list of the top states with the best and worst credit scores below.
While it’s unlikely that any location will directly impact your credit score, you may want to consider that in some cities, the average household is more financially stable than others. If we look at the city with the highest average credit score, for instance, Minneapolis-St. Paul has an average median income of almost $70,000 per year, whereas a city like Shreveport, with a much lower average credit score, has a median income of only $42,157. So, it’s possible that the higher income directly affected the credit scores as card holders were more financially stable.
A good credit score is a sign of healthy money management — it’s also necessary if you want to afford many of life’s necessities. For example, if you buy a home this spring, a higher credit score will get you a lower mortgage, saving you money. The same is true for car loans; a higher credit score can get you a lower APR on your auto loan.
While a credit score can determine which financial products you have access to, the score itself can be heavily influenced by where you live, finds a new study from CreditRepairEnforcers.com. Using Experian data on local credit scores, CreditRepairEnforcers.com calculated the average credit score by the state to find the 10 states where people have the best credit scores — and the 10 with the worst credit.
10 States With the Worst Credit Scores
What is a bad credit score? While the top 10 states have high credit scores that border on excellent, the 10 with the worst credit scores have “fair” to “poor” credit ranges. Among the states with the worst credit scores, a high majority — eight out of 10 — are located in the South, showing a significant trend of poor credit in this region.
According to Census Bureau data, these states with the lowest credit scores also had lower median household incomes; nine states had incomes below the national median of $53,657. Low incomes are a significant risk factor for mismanagement of debt. With fewer financial resources, low earners are more likely to take out loans or rely on credit but will also have a diminished ability to meet their credit obligations and stay current on payments.
You must check your credit score and credit report if you want a perfect credit score or the highest one possible. You can get your free credit report online by visiting AnnualCreditReport.com. Getting a free credit score, however, might be a bit trickier. In most cases, you will likely have to pay a small fee to one of the three credit bureaus — TransUnion, Experian, or Equifax — to receive your credit score.
Methodology: To generate average credit scores by state, CreditRepairEnforcers.com sourced average credit scores for 213 U.S. cities reported by Experian in its 2015 State of Credit report. These credit scores by the city were grouped by state. CreditRepairEnforcers.com then averaged all cities’ credit scores reported in each state, including the District of Columbia but excluding Delaware and New Hampshire, for which no city credit scores were reported. These credit score averages were ordered from highest to lowest to find the states with the best and worst credit scores.
Credit score and open credit card data are from Experian. We analyzed 143 of the largest U.S. metropolitan areas.
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