10 States With the Lowest Credit Scores

Southern states have some of the lowest credit scores in the country, based on calculations from the credit bureau Experian.

Lenders use credit scores to assess the risks in extending consumers credit and determine how much to charge in interest. Though methodology varies among scoring models, they are all designed to reflect an applicant’s ability to repay debt.

To compare credit scores across the country, we looked to the VantageScore model, which was created by the three major credit bureaus: Experian, Equifax and TransUnion. Though they use the same model, credit reports vary, which can lead to different scores from each bureau for the same consumer.

Experian provided Credit.com with each state’s average VantageScore from the second quarter of 2013, and the scale ranges from 501 to 990. A newer model not used here, VantageScore 3.0, has a scale more aligned with other scoring models: 300 to 850.

Last quarter, average VantageScores ranged from 707 to 785, with an average of 748, among the 50 states and the District of Columbia.

To put that in perspective, 900 to 990 is considered excellent, 800 to 899 is good, 700 to 799 is fair, 600 to 699 is poor and 501 to 599 is bad.

States With the Lowest Credit Scores

Mississippi had the low score of 707, according to Experian’s data, and it was the only state with an average below 720. Eight of the 10 lowest scores came from Southern states — Nevada and New Mexico were the outliers — which reflects the geographical makeup of most states below the 748 average. Only two below-average states, Indiana and Michigan, were not in the South or West.

10. New Mexico — 729

9. South Carolina — 728

7. Tie: Oklahoma and Alabama — 727

6. Arkansas — 725

4. Tie: Texas and Nevada — 722

3. Georgia — 721

2. Louisiana — 720

1. Mississippi — 707

Living in one of those states doesn’t mean you have a low credit score, of course, and the difference among states with high averages and those with low averages is pretty small, considering that all state averages in this data are in the “fair” credit category. One way to get an idea of your credit score is to use a free online tool such as Credit.com’s free online Credit Report Card. It will break down your credit profile, give you multiple credit scores and tell you where your scores stand compared to other Americans.

Image: iStock