Credit Score Landscape: A State-by-State Look and Emerging Challenges
American credit scores remained โremarkably stable in 2024, averaging 715 according to experian data. however, recent shifts in reporting practices and the โฃincreasing popularity โฃof “Buy Now, Pay Later” (BNPL) services areโ poised to introduce new pressures on creditworthiness in the coming months.
credit scores are a critical factor in financial life, utilized by banks, landlords, credit card โฃissuers, employers,โ and utility providers to gaugeโฃ an individual’s likelihood of timely payments. A strong credit score typically unlocks favorable loan terms and lower interest โrates, while โขa weaker score can restrict access to credit.
Several key developments are impacting the credit score environment. FICO, a major โcredit scoring provider, has begun incorporating data from Buy Now, Pay Later (BNPL) plans into its scoring system. BNPL allows consumers to spread purchases into interest-free installments, provided payments are โmade on schedule.โ While offering convenience,โ financial experts caution that managing multiple BNPL plansโฃ requires careful trackingโ to avoid overspending and accumulating debt.
Furthermore, reporting of federal student loan data resumed after aโ multi-year pause implemented during the COVID-19 pandemic.Payments were suspended for several years, and missedโข payments were generally not reported to credit bureaus during this period. The reporting “on-ramp” period concluded in October 2024,leading to newly missed payments and delinquencies impacting credit scores once again.
By February 2025, these changesโ contributed โto the average FICO score holding steady around 715, but with critically important individual variations. data from the Federal Reserve Bank of New โYork revealedโค that โขover two million borrowers experienced โcredit score drops of 100 points or more in the first โquarter of 2025,โค and more then one million sawโ declines of 150 points or more. borrowers with initially higher scores were often most affected, though those with lower scores also experienced decreases.
FICO reportedโ thatโ the percentage โขof the โpopulation with a delinquency of 90 days or โฃmore in the past six months โincreased from 7.4 percent in January โค2025 to 8.3 percent in February 2025 – a 12 percent riseโ – directly following the resumption of student loan delinquency reporting.
State Credit Score Averages (2024)
Significant regionalโฃ variations exist in average credit โscores. In 2024,Wisconsin boasted the highestโ average score at 738,followed โคby โขVermontโ (737),Newโ Hampshire (736),Washingtonโ (735),and North Dakota (733).
Conversely, โthe โlowest โaverage โฃscores were found in Mississippi โค(680), Louisiana (690), Alabama (692), Arkansas (695), and a tie between Georgia and Texas (both 695). A concentration of states with lower averageโ credit scores is observed in the โขsouth.
while a majority of Americans currentlyโข maintain credit scores withinโ the “good” range, the evolving reporting landscape andโข the growing integration of BNPL services into credit metrics suggest potential shifts inโฃ the credit score distribution throughout 2025 and beyond.
