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Question: Who
would you rather lend money to? Bob M. from Minnesota, or Jerry R. from Texas?
Don't know? Not enough info? Read on my friend, that question is soon to be a no brainer... According to Experian, the answer appears to be yes. Take a peek at Experian's National
Score Index and see for yourself. Just mouseover a state and it will give the average credit score for that state.
In almost every case, if you start on a northern state and move south from there, the average scores will drop. Let's take
a closer look... Starting with the upper west coast - Washington. Residents there have an average credit score of 705. Ok not bad, so
we'll go straight south and hit Oregon - state average there is 702. Not a big difference, let's keep moving. Just south
of that is of course California - with an average of 690, that's quite a dip compared to its neighbor to the north. Granted, California is a large state which is, by far, the most populated state in the US (Texas is a distant 2nd), and will have many more
credit scores to figure in than Oregon, but you can already see a pattern starting
to take shape here. This trend continues across the nation, now we will take a closer look at the mountain time zone area.
We can plainly see this pattern is still going. Wondering if maybe our
nation's mid section will break the mold? Nope! Take a look: This trend continues eastward in the same fashion. Ok, we've uncovered good evidence to support the theory that the northern population has better credit,
so the question is - why? Maybe it doesn't have anything to do "north" or "south", maybe it depends on how densely populated the area is.
So does it have any correlation to the state's population? Let's find out. Here are the top 10 states, and their average scores, ranked by population as of July 1, 2006: The best average score on that list is 712 for Michigan, which is roughly equal in latitude to New York,
which comes in at 707, so that doesn't tell us much other than cold winter weather brings higher credit scores.
Pennsylvania comes in a close third with 704, but again, that only tells us that with more snow comes
better credit. Wyoming, which is also a one of the northern states, is the least populated state in the US and comes in at strong 703. With this considered, it appears that population has little to do with the average credit score,
and more to do with the state's average winter temperature. Why do the northern states have better credit scores? Is the climate
really a factor? Does cold winter weather help keep consumers from running up too much credit card debt? Do residents of
northern states miss fewer auto loan or mortgage payments on average than residents of the south? Maybe less foreclosures?
Or is it the result of some other factors that we left out of the equation? -At this point I just don't have enough information to say for sure. Minnesota! I don't know about you, but when I think of cold wintery weather, a
couple of areas come to mind - Minnesota is one of them. And guess what, it is also the northernmost
state in the contiguous 48 too. Coincidence? Sure doesn't seem like it. According to Experian's National Score Index,
Minnesota's average credit score is 721, which puts it at the highest in the country. Alaska also comes to mind as one of the coldest spots in
America, and also qualifies as the northernmost state in the US, but they only come in at an
average score of 688. This is one of the very few exceptions to the theory "colder weather brings
higher credit scores". But is that an unfair comparison since it's not one of the contiguous 48 states? Could be. Hawaii's average credit score comes in at a healthy 709, which also
breaks the mold since it is the southernmost state in the US. But like Alaska, Hawaii is also not a contiguous state,
which seems to be what makes the difference there. I know you're curious, so here's a list of all 50 states ranked by average credit score according to Experian's
National Score Index,
as of August, 2007:
Do Northerner's Wield Better Credit?
States are listed from east to west, and north to south:
Still unanswered - Why?
So which state has the top credit score?
Where does your state rank?
Revisited: Credit Risk By State
There are really no definitive answers as to why, but let's go back to the question at the top of the page:
Based solely on the
information in this article, sight unseen other than
home state, who would you be more comfortable lending money to? Bob M.
from Minnesota, or Jerry R. from Texas? No offense Texas, but my money would
be on the guy from Minnesota. If these numbers are right, ya gotta like your odds on that one!