America Earns a C+ in Credit Scores, What’s Your Grade?

Credit scores can be a symbol of financial success for many, but for others they represent a barrier to achieving their goals. With an average credit score of 680, many Americans have trouble purchasing a home or obtaining new lines of credit. This score is comparable to a C+ in school.

At the state level credit scores are even lower than 680. Nevada has the worst score with about 670, according to Other states ranking at the bottom of the list are Texas, Louisiana, Mississippi and South Carolina. The states with better credit scores are Minnesota and North and South Dakota with an average of 720. Vermont, Montana, Iowa, New Hampshire, Wisconsin, Massachusetts, Nebraska and Connecticut also have above-average scores of 710, according to

Today credit is crucial to qualify for low-interest rate loans, to obtain credit cards and even to get a job! As in schools teachers measure students’ performance by assigning grades, credit agencies determine consumer behavior by providing credit scores. Having a score of 800 or more represents an A. In order to get a decent interest rate on a loan or credit card, a score of 700 or better is required.

The magic number developed by FICO is composed of the following factors:
-Payment history 35%
-Amounts owed 30%
-Length of credit history 15%
-New credit 10%
-Type of credit in use 10%

If you don’t have a perfect score, don’t worry. There are strategies you can use to improve your score. Experts at recommend the following to increase your credit rating:

Review your credit reports and fix mistakes: The first step is to fix mistakes on your credit report. Go to to get your free credit report. Then check that all the accounts listed belong to you. Check for accounts that are supposed to be discharged or settled through a collection agency. These accounts should show a balance of zero. If you need to dispute any information, contact the credit reporting agency reporting the incorrect information or credit grantor. In some cases you may have to contact both to ensure mistakes are properly fixed.

Let time heal the wounds: As negative information becomes older, it becomes less important on your credit file. Sometimes, waiting for the negative information to get older is the best strategy, especially if everything on your credit report is accurate. Of course, you’ll also want to continue to build positive new credit references.

Ask your creditors for help: Sometimes unusual circumstances may cause you to miss credit card payments. For example, you may have been in a car accident and unable to work and keep up with your bills. If you had a good payment history, you may want to ask your creditors to delete those previous late payments and reduce the interest rates on your credit cards.

Build new credit: Paying on time is crucial when it comes to building credit. Keep in mind that carrying balances and paying interest is not necessary for rebuilding good credit. If you don’t currently have any credit cards, you should get a secured credit card, where you place a security deposit with the lender in exchange for a credit card with a low limit. Once you have used the secured card for more than a year and made payments on time, apply for an unsecured credit card.