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The average borrower in all but seven states had good credit in 2018, according to a new report from Experian.

Minnesota led the way with an average VantageScore of 713. Nationwide, borrowers posted the highest scores since the Great Recession, an average VantageScore of 680 last year, according to the State of Credit report.

All 50 states, as well as Washington, D.C., saw year-over-year improvements but still had work to do to unlock excellent credit. Mississippi had the most ground to gain with an average score of 652 in 2018, the report released Monday shows.

Overall, the new report indicates positive signs for the economy, says Rod Griffin, director of consumer education and awareness at Experian.

“People are showing confidence to make purchases and are comfortable repaying those debts. The data shows they’re managing their bills well and keeping their balances relatively low nationally,” Griffin says.

The three major credit reporting companies – Experian, Equifax and TransUnion – developed the VantageScore in 2006. The three-digit measure is an alternative to the more established FICO score. Both measures range from 300 to 850 with higher scores signaling borrowers are less likely to become delinquent on their balances.

Financial institutions are the main users of VantageScores. The lenders typically look at the scores in deciding whether to approve requests for a credit card, according to a VantageScore Solutions market study released in 2018.

States with the highest average credit scores

  1. Minnesota — 713
  2. South Dakota — 707
  3. Vermont — 705
  4. New Hampshire — 704
  5. Massachusetts — 703

VantageScores ranging from 661 to 780 are considered good. They help users access competitive interest rates and favorable terms on their credit cards and personal loans. The best rates and terms are reserved for those with excellent credit represented by scores from 781 to 850.

“In states with the best scores, credit utilization rates tend to be lower,” Griffin says. “People who use less of their available credit tend to manage it better. That’s really driving the scores.”

States with the lowest average credit scores

  1. Mississippi — 652
  2. Louisiana — 653
  3. Nevada — 659
  4. Georgia — 659
  5. Texas — 659

VantageScores ranging from 601 to 660 are considered fair. While borrowers may not face the same struggle accessing credit as those with poor scores of 600 or less, they likely will have to borrow at higher interest rates, which could add hundreds or thousands of dollars on top of the original debt for those who carry a balance from month to month.

“The states with the lowest scores tend to be in the southern part of the country,” Griffin says. “It’s not that people have too much credit card debt and that’s why. It’s cultural in some cases. It may be related to the income levels and the job markets or lower level education levels in some cases. It’s hard to pinpoint one reason.”

Improving credit scores

The average VantageScore still remains below the 685 peak of 2008, signaling there’s more room for improvement among borrowers. Griffin recommends consumers start by pulling their credit scores and information.

Various companies provide consumers with tools to track their credit standing. Consumers can also request free copies of their credit reports annually from each of the three major credit bureaus. Copies can be obtained online at AnnualCreditReport.com. These reports do not provide consumers with their credit scores but rather the underlying payment and debt information that helps inform those measures.

You can also get your TransUnion credit report and score for free with Bankrate.

“If people understand how credit scoring works it opens the door to access to better quality credit, lower costs and greater financial opportunities and inclusion,” Griffin says.

Paying your credit accounts on time and keeping outstanding balances low will gradually help increase credit scores. The recently introduced Experian Boost service could improve scores for those who have a positive track record of paying their bills on time and maintaining their bank accounts.

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