June 18 2009|03.49 PM UTC

Jonathan Rivers

Financial Responsibility in the United States

Category: CreditTags: , , ,

Your credit score is a very important part of personal financial health, insuring that credit is extended to you, and at the best rate possible. There are various factors considered when calculating your individual score, and it is important to be familiar with exactly how each of these positively or negatively affects your personal rating. The following map shows averages by state, so you can see how you stack up to the rest of the country.

(click to enlarge)

Credit Score Map

Hightlights from the infographics:

Your credit score

FICO scores (credit-bureau ratings produced by Fair Isaac) are provided to lenders by the three major credit reporting agencies: Equifax, Experian, and TransUnion. The higher your score, the lower a credit risk you are to lenders.

Discounts on a FICO score

To get your real FICO credit score, you’ll need to buy it from Fair Isaac at myfico.com. Before you purchase the FICO score, search around online for myfico promo code that will usually give you up to 25% off your total order.

What’s in your FICO

FICO scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five major categories. Here are the percentages reflecting how important each of the categories are:

  • 35% – Payment history
  • 30% – Amounts owed
  • 15% – Lenght of credit history
  • 10% – New credit
  • 10% – Type of credit used
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{ 34 comments… read them below or add one }

ian June 18, 2009 at 7:22 pm

good to know. real informative. i like the slogan!

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Rich June 18, 2009 at 7:34 pm

Can anyone comment on the interesting North –> South pattern we’re seeing here?

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GEORGE June 18, 2009 at 8:07 pm

world of warcraft arena reminds me of this, yeh! for games

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ben June 18, 2009 at 8:09 pm

“Your credit score is a very important part of personal financial health”. Credit has nothing to with financial health. Debt is not healthy in any form.

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jerry June 18, 2009 at 8:18 pm

OK so basically southern rednecks are bad at managing their money…what else is new?

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FYI June 18, 2009 at 8:40 pm

Do you understand this is a con? Who owns the FICO score? You can get a credit report, but it does not have the FICO score. The laws past limiting the ability to go bancrupt preceeded this planned ecomnoimic down turn. Those laws wee preceeded by law changes which allowed interstate banking.

Why did they change laws limiting banks to doing buisness to only one state? These laws were put in place to limit the damge one bank could do, AND THEY DROPPED THEM… NOW WHAT?

China is ordering the USA about how to conduct oursleves. who set all of this up? Please go search the term Bilderberger. Once a year there is a meeting held, and they decide what will happen on a global scale. I know people will poo poo this, but what part of this is a lie?

Look it up. This is all planned. WHY DID THEY DROP THE INTERSTATE BANKING LAWS, AND LIMIT BANCRUPT LAWS? WHAT IS GOING ON?

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BS June 18, 2009 at 8:43 pm

please do not post this stuf AND THEN ask for opinions IF YOU WILL NOT ALLOW the comments…please stop wasting my time.

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Bridget June 18, 2009 at 8:46 pm

The North – South pattern is caused by the peoeple wanting vacation homes in the warmer areas of the US (i.e. Florida, TX, ect) These are the people who are taking a 15 yr ARM with 1% down.

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daniel June 18, 2009 at 8:55 pm

I live in Georgia, and my score is 810.

I did, however, see a new Escalade parked in front of a single-wide trailer the other day…

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jason June 18, 2009 at 9:08 pm

Brilliant diagram.

The north-south divide is obvious, but the other key trend is the hollowing out of Michigan and the other industrial heartlands.

Getting your credit report sorted is key where-ever you live or whatever your financial condition …

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David McElroy June 18, 2009 at 9:11 pm

Jerry, you might need to learn to understand maps and demographics a bit better. Your broad overgeneralizing makes you look like an idiot. Alabama, Tennessee and Florida are in the same credit band as Michigan, Colorado and California. And Nevada is in the worst band. So your generalization isn’t exactly right. If you’d like to adjust for race, I think you’d find that the white rednecks you look down on so much manage their money not much differently from the white yuppies in other places. Of course, that wouldn’t fit your simplistic story line and wouldn’t let you feel so superior, would it?

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Parker June 18, 2009 at 9:58 pm

Its like a RAINBOW!!

Thats the Latitudinal Theory at work: the people closer to the equator have life easier and therefore they don’t develop as much intellectually.

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jmomo June 18, 2009 at 10:03 pm

Golly. Look how the relatively financially poor Dakota states are in the green, and the farther you get, the more red it gets. Can anyone guess which states are where the vast majority of credit card companies are based out of? (Psst, it’s South Dakota)

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sidewinder June 18, 2009 at 10:27 pm

“Alabama, Tennessee and Florida are in the same credit band as Michigan, Colorado and California.”

Yes, but Alabama, Tenneesee & Florida are the best, credit-wise, that the South has to offer.

Michigan, as has been noted above, has been hollowed out by the failure of the domestic auto industry. California is often referred to by the denizens of the South as “the Land of Fruits & Nuts” but is no worse at managing its money than the best of the South. Same for Colorado.

As for “adjusting for race” that’s the remark that proves the South is still the South.

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Parker June 18, 2009 at 11:24 pm

Mr. McElroy,

Just think about what you’ve said for a few seconds before getting too aggressive. The big states average out understandably. But look at the extremes. All of the reds are in the south, and all the greens are in the north. And even if you go to the next level, the yellows are all north of the old mason dixon line, and all of the light reds are south of it. I’d say thats definitely a trend. Jerry is spot on!

Actually look at texas and move up, each state gets better. In fact, the ONLY states that are worse than a state to its immediate south are Michigan, West Virginia, New York and Maine. The other 44 continental states follow the trend.

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BillShrink Guy June 18, 2009 at 11:34 pm

Hey guys, though there is a clear difference for certain regions in terms of consumer credit worthiness, we should all be aware that there are many other factors at play. Labeling an entire region of population simply due to one assumed factor is a bit short-sighted.

Consider the fact that many of these regions also have different industries, different state GDP, different population level, and different consumer needs, it should be evident that there are numerous reasons that can effect a region’s consumer credit worthiness. Everyone should also be aware that a person’s income, race, age, and sex, are not factors that goes into a FICO credit score.

For those that thinks credit scores are “debt score” or some evil industry plot from the MAN to keep people down, you should note that most people that have excellent credit will quickly point out that they have excellent credit because they do NOT have a large amount of debt.

Ben: Despite your misgiving, credit is important to a person’s financial health. Credit and debt are two different things (though of course related). Take a look at the definitions in the dictionary for credit (beyond the finance definition): source of honor; something that gains or adds to reputation or esteem; recognition by name or a person contributing to a performance; recognition by an institution that a person has fulfilled a requirement; influence or power derived from enjoying the confidence of another or others.

They’ve chosen the word credit to describe the financial instrument for a very specific reason. A good consumer credit worthiness is about showing your ability to manage money along with cash flow, and showing responsibly in borrowing money and paying that very money back. It is not about accumulating debt.

No matter how you feel about it, having good credit is important as it allows the average consumer to purchase a home at a reasonable interest rate, and the difference between bad and good credit can be thousands of dollars in savings for the same home loan.

Take a look again at the chart, everyone should note that although the average consumer credit score in the US is at about 650, more than half (58%) of the United States have scores that are considered good or excellent credit score (700+). Most people are responsible with their credit, and I’m sure most of these people with good credit will not consider themselves large carrier of debt.

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TWilson June 19, 2009 at 12:17 am

The comments about the credit stuff stated above it completely ridiculous.

1. People above 720 will get the best rate is wrong it is actually 740+.

2. 520 will not even get a loan at all, let alone 4% higher. I dont know where they got this figure other then out of their keister…

3. It says their is not a single cutoff score, but there is. 620 is the cutoff for a mortgage.

4. There are way more then 5 items that effect your credit score, and their is no pie chart that one can develop to show the percentage of values that will change your fico.

5. They dont max you credit cards well that is obvious, but the truth is try to stay under 50% of your available balance so that it doesn’t effect your score negatively.

6. Don’t use a card and then pay it off when you get the bill. This doesn’t build credit this is not credit at all. It defeats the purpose. You need to have a balance on your card to report how you manage your credit, otherwise your just using the credit like cash and that doesn’t establish anything.

7. It says not to close credit cards that are old and inactive, this is not true either. You need to limit the amount of cards you have. The perfect credit report would have 1 mortgage 1 car and 3 credit lines. If you have say 10 credit lines then you are a risk regardless of your credit score because in one day you can pull it all out and leave the country. Keep your lines limited to 3 if you can.

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BigQue$tions June 19, 2009 at 12:24 am

“For those that thinks credit scores are “debt score” or some evil industry plot from the MAN to keep people down, you should note that most people that have excellent credit will quickly point out that they have excellent credit because they do NOT have a large amount of debt.”

You DO have to have debt to raise your credit score, BUT…
NO ONE knows exactly how the scores are tabulated.
The free reports we can receive annually DO NOT have the score.

This I$ a con job. It is a …. ah nevermind, who knows your agenda here.

My only advice is If you do not need to borrow soon,
then FREEZE your credit with the three seemingly “GOD CHOSEN” credit reporting agencies, AT LEAST that way no one can steal your identity and “borrow” your credit. Of course the GOD CHOSEN reporting agaencies do not wnat this, becasue thgen they cant sell your report. but WHY SHOULD THEY BE GOD CHOSEN TO MAKE MONEY ON YOUR REPORT ANYWAY???

THIS IS ALL A CON JOB!!!

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re_tox June 19, 2009 at 12:49 am

You can also see credit is a great method for the feds, and like the above poster said the Bilderberg to increase the United States’ national debt and control the monetary supply.
Control of money in a monetary based world basically makes you god. Not a god that keeps you idle by telling you to put all your hope and effort into him instead of that hope going into mankind and that effort towards peace as well as our other worldly problems. This god will keep you as a slave to run his world, through the mindless repetitive task of labor.
They didn’t put that on the chart though.

Congratulations to everyone whose maintained a decent credit score in this recession caused by the general ignorance of our population though.

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BillShrink Guy June 19, 2009 at 12:54 am

Twilson: Regarding 720/740, it varies depending on the actual lender, but both are very decent credit score ranges.

Though many factors are included in your score and of course exact formula to the scores are closely held, the percentage above are straight from Fair Isaac, and are indeed the major factors that goes into a person’s credit score. If you pay your bill on time, limit the amount of credit utilization ratio, build a long positive length of credit history, limit intake of new credit, and have a good mixture of installment and revolving credit, then it is very likely you will have excellent credit and a great credit score.

What you’ve mentioned about not paying off your bill in full in order to show managing of credit is a myth. Credit card companies will report your balance to the credit reporting agency even if you pay your bill in full. The balances are reflected from month to month, and in actuality, certain credit reports you can request will show those balances from month to month on your report — even if you pay your bills in full. I’ve personally never carried a balance, and my scores are in the ~800 ranges. As mentioned, you do not need to go into debt, and you especially don’t need to carry a balance to build good credit.

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TWilson June 19, 2009 at 2:09 am

1. Your right it varies on the actual lender, however if your going to say the most favorable rate then you must use the tightest lender that requires a 740. I speak with customers every day that have 700-735 or so they think their credit is perfect and therefore demand the best mortgage from me. Unfortunately, I have to educate them at the expense of their ego.

The the items listed in the pie chart are responsible for the majority of your score, the percentages are a guess at best.

You aren’t required to carry a balance to have a perfect credit score, however your card limit will never be increased and your credit company may close your card if you do not carry a minimum balance on it. I guess this would be more applicable if you were trying to establish credit, but we are talking about getting a good credit score so take it.

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William H June 19, 2009 at 5:23 am

Guess they didn’t list DC because web browsers can’t display infra-red… ;)

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bob June 19, 2009 at 6:55 am

“OK so basically southern rednecks are bad at managing their money…what else is new?”

Try “Hispanic immigrants and blacks.” The states with the worst scores are actually the minority-majority states.

And TWilson is a tool. “It says not to close credit cards that are old and inactive, this is not true either. You need to limit the amount of cards you have.” – that’s complete BS. Closing older cards will shorten the “credit age” significantly, which only damages your credit. I know that first hand. My “credit age” is only 7 years. I screwed myself over by closing old cards and paying only cash for things for YEARS.

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Sonny June 19, 2009 at 6:59 am

What is most striking is the north-south difference, a slight contrast to the coast-midland difference in other aspects of our society. I thought people in the South were more religious and would do a better job of paying their bills on time.

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klutzo June 19, 2009 at 7:29 am

I grew up in the far north, but have lived in the south for 29 years.

The cost of living is just as high here, but wages are only about half as much for the exact same job, and I am not exaggerating that to make my point. Unions never got a foothold here, and we have two classes. We have McMansions one block from shacks, with no middle class buffer zone.

While heating costs are much less, I have found everything else to cost more. Air conditioning is more, water is much more, and you must do a lot more laundry and buy more clothes because constant washing wears them out, car a/c is always breaking down, there is less cheap, older housing, because most of the homes were built after the invention of residential a/c. Also, you must have a car to live here, as there is virtually no public transport and thngs are spread way out. It is too hot and humid to walk to work and there are no sidewalks anyway. I could go on, but you get the point.

Therefore, I am not surprised that people in the south have worse credit scores. The RELATIVE cost of living is much higher. I recently read that the Tampa Bay area, where I live, has the highest relative cost of living of anywhere in the U. S. I’ll bet most people are surprised by that, and would have guessed New York City or San Fransisco.

BTW, my credit score is 825. When I asked why it was not a perfect 900, I was told: “because you have not bought enough expensive items on credit”.

klutzo

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Rodney Lewis June 19, 2009 at 7:49 am

the Credit score. These people are the biggest thives in the history of America. They should have been shut down years ago. It time to tell them to take a flying leap. when they sell our info and then charge us for our info and come to find out they dont even give us the same info that they give to Banks. It time to say to Hell with the credit score. And it time to shut them down.

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VinnyB June 19, 2009 at 12:02 pm

@Twilson – where are you getting your information? I’m a graduate student in my mid-20s, only had credit cards for 3 years now. But I pay my entire month’s balance in full every month on each credit card. My credit limit has increased steadily every few months over the last 3 years, and I never carried any minimum balance. My first credit card only had a $500 limit, I actually had to pay the “bill” in the middle of the month so I could buy more stuff during the month. After 10 months or so they increased the limit to $1000 and I also got another credit card with a limit of $1,500. Three years later, I have the Chase Freedom card with my limit at $10,000. All by paying my balance in FULL every month, no finance charges, no interest.

The idea that you have to carry some debt with the credit card (at exorbitant rates mind you) to get a higher credit limit or a good credit score seems kind of ridiculous and in my personal experience has not been true.

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Gavin June 19, 2009 at 12:26 pm

Isn’t “Don’t max out your credit cards and pay the balances in full if possible” badly worded? I thought they were suggesting that I should NOT pay my cards in full! Perhaps a well-placed comma would do the trick.

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Ed Klopfenstein June 20, 2009 at 8:09 am

It’s funny that Texas has the worst credit score in the nation but currently has one of the best state economies. It sounds like the oil boom happening down there is fueling a mini credit bubble that will burst as the nation begins the improve from the recession. I have to wonder if Texas is looming drag on economic recovery?

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MadMonk June 20, 2009 at 11:26 am

Oklahoman with a 760 score here. Living within one’s means is key.

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The Devastator June 24, 2009 at 2:28 pm

I don’t even know what my credit score is! I’ve never needed to. I don’t have any credit cards and just one car loan. Once they’re paid I don’t intend to take out loans for anything else in the future. I’ll probably just save money for whatever I need in the future. I was raised in remote area of missisippi where we mostly dont buy new things. It kind of becomes a lifestyle over time and has served me well. I bring home 3600 bucks a month after taxes and 2600 of that is straight pocket money. The whole credit situation has no bearing on my lifestyle.

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Moneymonk June 26, 2009 at 4:19 pm

Wow seems like the south is clueless

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Credit Score Guy July 26, 2009 at 9:51 am

How you compare to people in your state is meaningless. The lenders don’t change their lending standards or interest rates by what’s happening to average scores.

I’m an ex-FICO exec, and we scoffed when these state averages were released. They are fun to debate, but ultimately, you aren’t trying to compete with others — most of us could have great credit scores, and that would mean more access to loans. Not just lending but less risky lending.

Oddly, credit scores are going up because most Americans have stopped using credit so much [hence, the 7% savings rate]. This is in the face of credit card issuers trying to lower limits and close down unused cards [all of which lowers credit scores].

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Sam September 22, 2009 at 10:32 am

I’m wondering if the state of education in different states has anything to do with the north south divide? I’ve had 2 experiences that make this plausible. First, I met a girl from Kansas who didn’t even know what evolution was and then I met 2 girls from South Carolina who thought Massachusetts was in the west. So far I have not met one person from the south who seems to have had a decent education. (All of them were white FYI for the racists)

Perhaps if they spent less time on creationism, Jesus, and racism they would have time to learn simple economics, basic science, and elementary geography. This was all stuff that I learned before the 5th grade. Could it be that they are shooting themselves in the foot?

By the way…the south hates big government so much, but they are the takers. We pay the taxes and they get the money. So it’s interesting that we feel it’s important to keep paying taxes so we can give it away to the poor. BUT the poor thinks it would be better if taxes and public works were abolished.

So, there would be no more paved roads, no more fire-department, no more public schools, etc. Then we would just be better off to break away from the south and let them fend for themselves. It would be a 3rd world country. Never-mind a whole other country. We only want to fly over it anyhow. Fuck em. Let’s keep our money.

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

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