As credit scores hit an all-time high this year, new data from FICO shows some areas of the country have made outsized gains while others have not followed the trend.
Each state saw its average credit score increase between April 2020 and April 2021. But the southern and western states (including Florida, Georgia, Michigan, and Nevada) saw the largest increases over the course of the year. of this period. At the city level, FICO found that the Florida and California metropolitan areas were more likely to experience large increases this year, as were cities affected by the 2008 financial crisis, such as Las Vegas and Detroit.
The average credit score in the United States in April 2021 was 716, up from about 686 in 2005. FICO has found that the states of New England and the upper Midwest have higher scores, on average.
Compared to the country as a whole, the top 10 states with the highest FICO scores have a population with lower delinquency rates, fewer people using more than 70% of their available credit, and fewer people with three surveys. or more credit in the past year. .
How are credit scores used?
Credit scores are used by lenders to determine the creditworthiness of mortgages, personal loans, student loans, credit cards, etc. The three major credit bureaus – Experian, Equifax, and TransUnion – calculate credit scores using data from your credit report, which includes information about your timely payment history, total debt, and others. information about your credit history.
The higher your score, the more likely a lender is to see you as a reliable borrower and the more likely you are to benefit from favorable loan terms, such as lower interest rates or premiums.
Timely credit card payments, timely bill payments, and a low rate of credit utilization (using only a small portion of your available credit) can boost your score, while late payments and excessive use of your available credit can reduce it. Ratings range from 300 to 850.
Cities and States with the Highest Credit Ratings
Here are the top states and cities this year.
States with the highest average credit scores:
- Minnesota: 742
- Vermont: 738
- Wisconsin: 736
- North Dakota: 736
- South Dakota: 735
- New Hampshire: 735
- Massachusetts: 735
- Washington: 734
- Nebraska: 733
- Hawaii: 733
Metropolitan areas with the highest average credit scores:
- San Francisco Bay Area: 746
- Minneapolis / St. Paul sector: 743
- Boston area: 742
- Nassau-Suffolk, New York: 739
- Orange County, CA: 736
- Pittsburgh area: 732
- Denver area: 731
- San Diego area: 729
- Washington, DC, area: 729
- Chicago area: 725
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This is the average credit score for each generation
