Visualizing American Credit Scores

The average FICO credit score in America hit 704 in September 2018, the first time it’s topped 700 since April 2017.  FICO released a detailed report showing the slow and steady march upward of the average credit score over the past decade.

Much of what goes into a credit score has a certain man-behind-the-curtain aspect to it.  Sort of like McDonald’s special sauce and the Coca-Cola recipe, no one really knows for sure and there’s quite a bit of secrecy behind the formula. 

That said, it’s a sad fact that something so mysterious (and controlled by just 3 or 4 private companies) does indeed affect our lives. 

Debt is shunned in the personal finance and FIRE blogosphere for the most part.  So you may have read some posts that disregard credit scores, because they claim they’re only pertinent if you’re trying to get a loan. 

And why are you trying to get a loan anyway? 

Well, maybe you want to buy a house and are one of the vast majority of Americans who doesn’t have $300,000 in the cushions of your couch. 

 

Why It’s Important

But your credit score can also affect your ability to get insurance or determine how much you’ll pay for it if you get it.  More recently, some employers have been using credit scores to check a prospective employees level of responsibility.  A controversial practice for sure, but happening nonetheless. 

So credit scores matter.  Me being a mapping geek I didn’t just want to report the new average scores, I want to see them on the map.  The FICO report did not have the scores broken out by state, but I found an Experian report from early 2018 that does. 

The Experian report uses Vantage Scores which, according to Wikipedia is “a consumer credit-scoring model, created through a joint venture of the three major credit bureaus (Equifax, Experian, and TransUnion)”. 

So here we go, this is the average Vantage Score by state, which is slightly different than a FICO score:

 

 

It always seems to be the Upper Midwest that excels in these things.  It’s weird how the highest scores are in clusters.  Another grouping of high scores is in New England. 

The amount of debt you have, including consumer debt from credit cards, can affect your credit score.  And your credit score can affect your ability to get a credit card.  

So how many credit cards do people have?

 

 

There’s some slight correlation in that the states with the highest credit scores mostly are not in the highest category for the number of credit cards.  Interesting. 

We in the personal finance community use our credit cards all the time, mainly to get free stuff.  But we pay them off every month.  Newsflash, most Americans don’t. 

So how much do people have on each credit card on average?

 

 

Wow, Alaska.  Ya’ll might want to pay that down a bit.

I find it very interesting that credit scores in America are hitting a high.  The rise of debt in American households is alarming, and is a constant drumbeat in the media.  It’s especially discussed in the world of personal finance blogs, since debt is something that severely hinders your chances of financial freedom.

But there’s an argument about whether or not debt affects your credit score at all, or could even possibly help it.  One thing is certain, having delinquent debt will definitely bring your credit score down.  According to Marketwatch:

The percentage of people who are delinquent on their debts — meaning they are 30 days or more overdue — hit 1.73% in the first quarter of 2018, up from 1.64% in the fourth quarter last year, but still below the 15-year average of 2.14%.

So collection agencies aren’t as busy as they’ve been in the past, and that’s a good thing.

 

Talking ‘Bout My Generation

A new favorite pastime is to compare generations against each other, because we all need to be on another team in life and do battle. 

From the Experian report:

 

My generation, Gen X, apparently has a thing for keeping a balance on retail credit cards, and debt in general.  Ouch.  C’mon fellow Gen X’ers, get with the program.

And yet another way to pit us against each other and compete is by age.  This graphic is courtesy of ValuePenguin and uses data from the FICO report that I mentioned at the beginning of the article.

 

 

Those numbers aren’t much of a surprise to be honest.  With age comes a higher net worth and bigger income.  And more wisdom, supposedly.  So one would assume credit scores would go up with age.

So there you have it, the geography of credit cards and credit scores.  Get on your team and talk smack to the others!