| FICO Score Ranges | |
|---|---|
| 850–800 | excellence |
| 799–740 | very good |
| 739–670 | Excellent |
| 669–580 | Prove legality |
| 579–300 | Very weak |
Keep in mind that creditors can define their own ranges, so technically an individual can have more than one credit score. However, because the FICO scoring model dominates the market, the ranges listed above are the most commonly used.
Why Choose FICO?
The FICO score is a specific credit score created by the Fair Isaac Corporation (FICO) in 1989. Considering that the FICO score is used in more than 90% of credit decisions in the United States, it is an ideal indicator for assessing the financial health of a particular area.
FICO scores consider payment history, current debt levels, types of credit used, length of credit history, and new credit accounts when determining creditworthiness. It offers several ways to explain why some states have lower or higher credit scores than their neighbors.
According to our research, the national average FICO score in 2021 is 714. This is a 4 percentage point increase from 2020 and the fourth consecutive year of score increase.
Note that FICO is not the only name. VantageScore was created in 2006 by the three major credit bureaus as a consumer credit score product that serves as an alternative to the FICO score. Although FICO is more accurate than other models due to its advanced algorithms and machine learning technology, FICO’s widespread adoption makes it a better candidate for this article.
State breakdown
FICO score
Minnesota had the highest average FICO score as of 2021, followed by Vermont, Wisconsin, New Hampshire, Washington, and North Dakota. Maine, Mississippi, and Nevada had the largest increases in FICO scores from 2020, each up 6 percentage points, while all 12 states saw increases of 5 percentage points.
Notably, most of the states with the largest improvements in average credit scores in 2020 were relatively close to the current national average. Furthermore, even the states with the highest average credit scores still fall into the “good” category, with the exception of Minnesota, which is two points above the “very good” threshold.
The quality of your credit score directly affects how much you pay back on your loan, including interest rates and premiums.
The state with the lowest average FICO score is Mississippi. It’s followed by Louisiana, followed by other neighboring states including Alabama, Oklahoma, Texas, and Georgia. Interestingly, Oklahoma and high-scoring state South Dakota saw the smallest increase in FICO scores since 2020, increasing by 2 percentage points each. Following those two states are 11 states that saw only a 3 percentage point increase, most of which started out with scores above 720.
It’s reassuring to note that no state had an average credit score below the “good” category, although this doesn’t indicate that the typical resident in that state is financially secure.
FICO and Household Income
In 2018, the Federal Reserve Board of Governors reported a moderate correlation between household income and consumer credit scores. This suggests that rising income inequality could lead to rising inequality in access to credit. It’s no coincidence that credit scores tend to be lower in the southern United States. In 2019, the U.S. Census Bureau found that 75% of the eight poorest states in the country are in the South.
Mississippi is particularly noteworthy in this regard; as of 2019, the Magnolia State has the lowest median income and the highest poverty rate in the U.S.
FICO and Credit Card Debt
Average credit card debt is another number that helps approximate the personal finances of consumers within a particular state, and while it doesn’t have a clear correlation to average credit scores, it does provide insight into the amount of a particular form of debt that a typical individual carries.
Which state has the highest average credit score?
According to Experian, Minnesota has the highest average FICO score in 2021 at 742. It is followed by Vermont, Wisconsin, New Hampshire, Washington and North Dakota.
What is the Average Credit Score in the United States?
According to Experian, the average FICO score in the U.S. in 2021 is 714. That’s 4 percentage points higher than the previous year and the fourth consecutive year of increase.
What is a good credit score?
Any score between 739 and 670 is considered “good.” The other four FICO score ranges are:
- Excellent: 850 to 800
- Very good: 799 to 740
- Normal: 669 to 580
- Very weak: 579 to 300
Bottom Line
It’s important to remember that the economic conditions of the state in which you live do not, in and of themselves, determine your credit score – that’s your responsibility. The average is calculated by adding up all the values in a given data set and then dividing by the number of numbers. While most values are likely to be relatively close, there may be outliers.
To have a high credit score, make sure you continue to pay off your debts, avoid late payments, and try to keep the balances on any credit accounts as low as possible.
