As credit ratings hit an all-time high this year, new Data from FICO shows that some regions of the country made outsized gains while others bucked the trend.
Every state saw its average credit score increase between April 2020 and April 2021. But southern and western states (including Florida, Georgia, Michigan, and Nevada) saw the biggest increases over the this period. At the city level, FICO found that metropolitan areas in Florida and California were more likely to see large increases this year, as were cities hit 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 around 686 in 2005. FICO found that New England and upper Midwestern states have higher scores, on average.
Compared to the nation as a whole, the top 10 states with the highest FICO scores have a population with lower delinquency rates, fewer people who use more than 70% of their available credit, and fewer people with three or more credit applications 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 and more. 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 other information about your credit history.
The higher your score, the more likely a lender is to consider you a reliable borrower and the more likely you are to qualify for favorable loan terms, such as lower interest rates or lower premium payments.
Timely credit card payments, timely bill payments, and low credit utilization (using only a small portion of your available credit) can boost your score, while late payments and l Using too much of your available credit can reduce it. Scores range from 300 to 850.
Cities and states with the highest credit scores
Here are the states and cities that topped the rankings 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
Metro areas with the highest average credit scores:
- San Francisco Bay Area: 746
- Minneapolis/St. Paul area: 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
