Mississippi News

Mississippi among best states for increasing credit scores

Mississippians may be doing a better job with their credit, but there’s still a way to go, according to a new report. The personal-finance website WalletHub released its new report on the States With the Largest Credit Score Increases. Mississippi ranks second among the states in its increase of average credit scores.  

The average credit score in Mississippi increased by 2.58 percent between the third quarter of 2022 and the third quarter of 2023. It was at 635 in the third quarter of 2023. The full report is found here: https://wallethub.com/edu/states-with-the-largest-credit-score-increases/131551 

Iowa ranked first in the United States in increase in credit score at an average jump of 6.6 percent in the past year, which is about three times more than people in most states. The average Iowan’s credit score went from 667 to 711, which also puts them at the highest average score in the nation, according to WalletHub Editor John Kiernan.

The average American has a credit score of 678, which puts them in the fair credit range. Residents of some states are faring better than others, but people across the U.S. should strive to keep improving regardless of where they rank. 

The increase in Mississippi was 2.58 percent, and went from 619 to 635. That’s still the lowest average credit score of any state, and it’s what WalletHub classifies as poor credit.

Arkansas residents had the third-largest year-over-year credit score increase, with the average score rising 2.4 percent from 624 to 639. Although there was a significant increase, the average score still remains the second-lowest in the nation, which can be partially explained by the fact that Arkansas is the least financially-literate state in the U.S.

“Working to increase your credit score now will open up financial doors in the future, and the best way to improve your credit score every month is to have a credit card and always pay the balance in full,” Kiernan said. “Even if you have a credit card that you don’t actively use but keep in good standing, it will still slowly increase your score each month. But if you do actively use your card, using less than 30 percent of your credit limit is also essential for credit-score improvement.”

Tips for Improving Your Credit Score

Pay on time on your credit accounts: On-time payments are one of the most crucial things for improving your credit score. You should always make at least the minimum payment by the due date.

Keep a low credit utilization: Using some of your available credit is better than not using any, although even with 0 percent utilization, your score will still improve. It’s best to use around 1 percent to 10 percent of your credit, although anything under 30 percent is good for your score.

Pay in full, if possible: On revolving credit accounts such as credit cards, paying your full balance each month rather than just the minimum payment can give your credit score an extra boost. It also helps you avoid paying interest.

Avoid opening too many new accounts: Opening several new credit accounts in a short period of time can have a negative impact on your credit score. Each new account results in a hard inquiry, which can temporarily lower your score. Be selective and deliberate when applying for new credit, and try to wait at least six months between applications.

Check your credit reports for accuracy: Obtain free copies of your credit report from major credit bureaus and review them for errors. Dispute any inaccuracies you find to ensure your credit report reflects accurate information.

Get personalized advice: Sites like WalletHub offer free credit monitoring and will give you personalized tips on how you can improve your credit score.

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