Texas residents have an average credit score of 677, placing the Lone Star State as the fourth-lowest in the nation.
A new study compared average credit scores across all 50 states using TransUnion data from late last year. Results showed that Only Mississippi (669), Louisiana (673), and Alabama (677) ranked below Texas, with the national average credit score around 702, placing the typical American in the “good” credit range, per WalletHub.
Minnesota has the highest average credit score at 723, followed by New Hampshire at 721 and Vermont at 720.
“The average credit score by state ranges anywhere from 669, which is in the middle of the fair credit range, to 723, which is well into the good credit range. That’s a 54-point difference… Moving to one of the top states may help you increase your own credit score, as they tend to have high average incomes, low unemployment rates and other positive economic factors that make it easier for residents to pay their creditors on time and limit their borrowing,” said Chip Lupo, a WalletHub analyst.
Additionally, WalletHub’s prior research found that Texas leads the nation in residents experiencing “financial distress,” defined as having shaky credit accounts with forbearance (short-term arrangements with a lender to suspend or lower loan payments) or other late or deferred payment plans.
The Lone Star state also ranks third nationally for accounts in forbearance per person and seventh for the share of people with distressed accounts at 7.1%.
One of the biggest contributors to Texans’ financial problems is credit card debt.
The low credit scores have real consequences for Texas residents. Financial experts say that credit scores affect everything from mortgage rates to apartment rentals to employment opportunities.
According to the Federal Reserve’s consumer credit data, Americans with lower credit scores will generally pay much higher interest rates on loans and credit cards.
