According to a new ranking from WalletHub, residents of California as a whole are average in their credit scores based on data from TransUnion as of October 2022.
From the analysis:
A person’s credit score is one of the biggest factors that determines the course of their financial life, from getting credit cards to qualifying for home loans to even renting apartments. The average credit score in the U.S. is 695 using the VantageScore model. That puts the average American just below the bottom of the good credit range (700). The score to ultimately strive for is at least 750, which marks the beginning of the excellent credit range. Residents of some states have built their credit better than others, though.
The average credit score for residents of California is 703, which puts the State in the middle of the ranked list. Minnesota is number one, with an average credit score of 724. Mississippi is last, with an average credit score of 662.
Source: WalletHub
Patrick A. Cozza, Executive in Residence and Lecturer, Wealth Management, Silberman College of Business, Fairleigh Dickinson University, notes a common misconception regarding credit scores:
People need to realize the more credit they take on, particularly credit cards, even if they don’t draw on the line, works against them as a negative from a FICO credit score standpoint. The FICO score draws on a variety of factors, such as salary, lines of credit, ability to keep current on outstanding credit, rental payments, etc. But it also takes note of someone attempting to secure additional credit from a variety of sources as the credit bureaus (Fair Issac, Experian, TransUnion) share data. And if you are denied credit, that is a significant negative to your FICO score.