Minnesota residents achieve highest average credit scores in the U.S
- Minnesota residents have the highest average VantageScore credit score in the U.S. at 726.
- A low average credit card balance and low delinquency rates contribute to this high score.
- Achieving good financial management can lead to better credit scores across the country.
In a recent report by WalletHub, it was revealed that Minnesota boasts the highest average credit scores in the United States, marking the third consecutive year for this achievement. The average credit score for Minnesota residents is 726 according to the VantageScore model, which classifies this score as 'good'. This high average score stands in contrast to Mississippi, which has the lowest average credit score at 672. The report suggests that a couple of factors contribute to the relatively high credit scores in Minnesota. One prominent factor is the lower average credit card balances carried by residents compared to the national average, which likely results in lower credit utilization rates. Credit utilization, which measures how much of one's available credit is being used, is a significant factor in credit scoring models. High utilization rates can negatively impact credit scores, hence keeping a low balance is advantageous for improving and maintaining a good score. Furthermore, Minnesota shows one of the lowest average credit card delinquency rates in the country. Payment history, another critical component of credit scoring, is incredibly influential. Therefore, consistent on-time payments among Minnesota residents likely help boost their overall credit scores. The WalletHub report also provided a broader view of average credit scores across various states. States like Massachusetts and Hawaii reported high scores of 718 and 715 respectively, while states like Mississippi and Louisiana fell at the lower end of the scale with scores of 672 and 677. Notably, the overall health of credit scores indicates that even states with lower average scores still fall within the 'good' range as defined by VantageScore. Economic factors, financial literacy, and habits around credit management likely explain the differences in average scores across states. This emphasizes the importance of cultivating good financial habits and understanding how to manage credit effectively.