Credit company Experian recently issued the 2020 Consumer Credit Review which revealed that Minnesota residents hold the title for having the highest average credit score last year, said CNBC. The state has held the title for nine consecutive years.
Minnesotans reached a score of 739 for 2020, which shows a slight increase from its 2019 figure, which is 733. Wisconsin takes the second place, with 732 in 2020 and 725 in 2019, and South Dakota with 731 in 2020 and 727 in 2019.
Aside from the three, the top ten list is composed of Vermont (731), North Dakota (730), Washington (730), Massachusetts (729), New Hampshire (729), Nebraska (728), and Hawaii (727).
Meanwhile, CNBC noted that southern states have lower FICO scores. The state with the lowest average credit score is Mississippi (675), followed by Louisiana (684), Alabama (686), Texas (688), Georgia (689), South Carolina (689), Arkansas (690). Oklahoma (690), New Mexico (694), and Nevada (695).
CNBC noted that there are five score categories namely Very poor (300 to 579), Fair (580 to 669), Good (670 to 739), Very good (740 to 700), and Excellent (800 to 850).
This categorization reveals that the highest and lowest average scores in the US fall under Good. With a range of 675 as the lowest and 739 as the highest, it is apparent that all states in the US fall under the same category.
The report explained that that FICO Scores “are used in over 90% of U.S. lending decisions, making it a must-know number before applying for any financial product.”
In other words, lenders look at it as a sign of creditworthiness, which can influence their decision to approve loan and credit card applications.
Aside from lending, credit ratings are also considered an important factor in renting and in some cases, employment.