People in These 9 States Have the Best Credit Scores in the Country

Is your state one of them?

A good credit rating is like a VIP pass that will have lenders and credit card issuers rolling out the red carpet. People with good credit are much more likely to be approved when they want to borrow money. And their interest rates are usually lower, saving them hundreds or even thousands of dollars over the life of a loan. Those with fair or poor credit may have to pay more interest, or even be denied outright.

As with individuals, some states tend to have better average credit scores than others. In The Ascent’s latest research report on average credit scores in America, we found nine that ranked above all others.

States with the best credit

The study looked at states with the highest VantageScores. VantageScores and FICO® Scores are the two most popular credit score models in the country. VantageScores range from 300 to 850, with a higher score representing better credit. Only the following nine states had an average score of 700 or higher:

  1. Minnesota — 713
  2. South Dakota — 707
  3. Vermont–705
  4. New Hampshire–704
  5. North Dakota — 703
  6. Massachusetts–703
  7. Wisconsin–701
  8. Nebraska–701
  9. Iowa — 700

Curiously, all of these states are in the Midwest or New England. It is not easy to determine why those who live in these areas seem to have better credit than the rest of the nation, but we can make reasonable assumptions about what they do not do do. Many of these people are unlikely to make late payments or max out their credit cards each month, as this can quickly lower your credit score. They seem to have a healthy relationship with credit and only use it when needed.

What is a good credit rating?

You may be wondering what the threshold is for a good credit score. The truth is that it depends on your lender. Each lender has their own criteria for what they consider an acceptable credit score, but VantageScore defines a 661-780 score as prime and a 781-850 score as superprime. Some lenders may be willing to work with you even if your credit score falls below this range. But if you want the best chance of approval and the lowest interest rates, you should aim for a credit score in the 700s or higher.

The FICO credit scoring model uses the same scoring system, where 300 represents the lowest possible score and 850 the highest. He considers a score of 670 or higher to be good, but again, it’s ultimately up to your lender to decide what’s acceptable in a given situation.

How to increase your credit score

If you already have a high credit score, that’s fine. Otherwise, don’t be discouraged. It takes time, but you can improve your score. Paying all your bills on time is the most important step you can take because payment history is the most important factor in calculating your credit score. A single late payment can knock down a great credit score by 100 points or more, and it stays on your credit report for seven years.

The second most important factor in your credit score is your credit utilization rate. This is the ratio between the amount you charge your credit cards each month and your credit limit. Using more than 30% of your available credit each month can hurt your credit score because it indicates that you can’t support your lifestyle without borrowing a lot of money.

Reducing your credit utilization rate is not difficult, however. You can charge less on your credit cards or spread out your spending so you don’t charge more than 30% of your credit limit on a single card. You can also try paying your credit card bill twice a month. The credit bureaus only see your ending balance at the end of the month, so paying once in the middle of the month and once at the end will make it look like you’ve only charged a fraction of what you got actually done.

Beyond that, limit how often you apply for new credit and don’t close old credit accounts. Then give it time. Credit scores are meant to give lenders a window into your long-term financial habits, so it will take months before you see any significant changes, but it’s worth it. Once your score improves, you won’t have to worry about your credit card or loan application being declined and you’ll save a ton of money in interest over your lifetime.

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