Credit scores are at their best since 2012 | finder.com

Credit scores are at their best since 2012

Ryan Brinks 12 January 2018 NEWS

Average credit scores have climbed to a five-year high

Americans’ credit is surging forward in a healthy direction and closing in on the peak average credit score of 2007.

As a whole, the creditworthiness of US residents is improving, as the average 2017 nationwide credit score of 675 rose two points over 2016 and is now just four points shy of the pre-recession average of 679, according to Experian’s State of Credit report.

The healthy direction of credit scores adds to the pile of other positive economic news, including extreme highs in consumer confidence and home affordability, extreme lows in financial stress, new all-time spending records and a surge in sales of new homes.

Fellow credit rating agency TransUnion also provided a prediction for a healthy credit market this year.

On the other hand, credit card debt has risen, too, to a new record of $1 trillion.

Each person’s credit situation looks different, and credit score averages range from state to state – 709 in Minnesota to 647 in Mississippi. But here’s the sum of it all.

The average American’s credit

All Americans Silent Gen Baby Boomers Gen X Gen Y (Millennials) Gen Z
VantageScore 675 729 703 658 638 634
Number of credit cards 3.1 3.0 3.5 3.2 2.5 1.4
Total credit card balance $6,354 $4,613 $7,550 $7,750 $4,315 $2,047
Number of retail cards 2.5 2.3 2.7 2.6 2.0 1.5
Total retail card balance $1,841 $1,354 $1,931 $2,122 $1,626 $770
Mortgage debt $201,811 $156,705 $188,828 $231,774 $198,302 $160,411
Non-mortgage debt $24,706 $15,161 $27,513 $30,334 $22,784 $6,963

Generationally, credit use and scores typically rise as people get older, while indebtedness peaks at middle age and then recedes.

Here are the nation’s other leading states.

Top 10 states (credit score)

Rank State Average credit score
1 Minnesota 709
2 Vermont 702
3 New Hampshire 701
4 South Dakota 700
5 Massachusetts 699
6 North Dakota 697
7 Wisconsin 696
8 Iowa 695
9 Nebraska 695
10 Hawaii 693

The national average of 675 is considered by Experian to be a fair credit score (650-699), while the best states boast scores that push into the good credit category (700 to 749).

Meanwhile, lower credit scores don’t translate to bigger debts. Despite its lowest-in-the-nation average credit score, Mississippi also has one of the country’s lowest debt loads, while Iowa has a top 10 credit score average and the smallest of all debt balances. Here’s the ranking of states whose consumers are doing the best at curbing credit card debt.

Top 10 states (credit card debt)

Rank State Average credit card debt
1 Iowa $5,155
2 Wisconsin $5,363
3 Mississippi $5,421
4 North Dakota $5,511
5 West Virginia $5,547
6 Kentucky $5,555
7 Indiana $5,581
8 Michigan $5,622
9 Nebraska $5,630
10 Arkansas $5,660

At the bottom of the list are several Northeast states, with Connecticut, Virginia, New Jersey and Maryland all averaging more than $7,000 per person. Saddled with the greatest debts per capita are Alaska’s residents, at $8,515.

Learn more about credit scoring and what factors are involved in your credit score through our Credit Score 101 guide, and check out the pros and cons of consolidating your credit card and other debts, including how that could change your credit score, in our debt consolidation guide.

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