This Midwest State Ranks Top For Highest Average Credit Score
Despite the many challenges Americans face due to the coronavirus pandemic, consumers are said to be managing their credit well, which is a surprise.
Experian, which recently conducted its 12th annual State of Credit Report, found that the average US credit score rose seven points to 695 since 2020, the highest point in more than 13 years.
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The report pointed out that many consumers were managing their credit relatively well before the pandemic hit. With the Coronavirus Assistance, Relief and Economic Security (CARES) Act, consumers still seemed to be in a good position in terms of financial well-being.
Also noteworthy, many Americans were ordered to stay home at the start of the pandemic, resulting in record savings levels and low unsecured and total debt levels, as well as low credit utilization rates and fewer missed payments.
This year, Experian partnered with Operation Hope, the nation’s largest nonprofit dedicated to improving financial literacy, to launch the first Hope Financial Wellness Index. The index sets out to highlight the average credit score in every state and city.
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“We believe credit education plays a vital role in driving financial inclusion and helping consumers reach their full potential,” said Alex Lintner, president of Experian Consumer Information Services.
Here are the states with the highest average credit scores.
Minnesota – 726
Vermont – 719
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New Hampshire – 718
Washington – 717
Massachusetts – 716
Here are the states with the least.
Mississippi – 666
Louisiana – 669
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Alabama – 672
Oklahoma – 672
Texas – 673
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In addition to each state’s average credit score, the State of Credit report also found that scores improved year-over-year for each generation, resulting in lower utility rates and fewer missed payments.
Credit utilization rates declined for every generation except Gen Z, which saw rates increase year-on-year. Similarly, credit card balances for Gen Z increased by $115 year-over-year, despite showing a decrease for every other generation.
Gen Z is the newest generation, born between 1997 and 2012. They are currently between 6 and 24 years old.
Overall, with consumers paying less, significant improvements have been seen among the younger generation.
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“While these findings are positive, we believe they do not tell the full story and the financial constraints many consumers face due to limited credit histories,” Lintner said.
Additionally, there are many individuals and communities who struggle with financial literacy due to lack of education and resources.
As we slowly begin to recover from the pandemic and the challenges of the past year and a half, the current state of consumer credit is critical.
Fortunately, Operation Hope seeks to find solutions for consumers, working to improve their financial health and literacy and help them manage their credit scores to make them financially sound.
“By helping people raise their credit scores, we are empowering them to take advantage of one of the most democratic tools in our country. From housing and employment to health and education, we are empowering them to improve our overall quality of life. credit can be availed for it.”
John Hope Bryant, Founder and CEO of Operation Hope, concluded, “We are committed to using the HOPE Financial Wellness Index for good in the communities we serve.”