Go West, Mortgage Lender: The Best Credit Scores in the U.S.

An analysis of credit scores nationwide shows where to look for the rebound in consumer spending, borrowing and confidence.

Author:: Brian O'Connell
Publish date:: Feb 14, 2012 1:00 PM EST

NEW YORK (MainStreet) – A report looking at the best state-by-state credit scores in the U.S. shows that, far and away, the farther west you travel, the higher the average credit score you will come upon.

MortgageMarvel.com, an online mortgage shopping website, examined about 330,000 mortgage applications from clients across the nation and found that, for the second year in a row, the Golden State has the most golden credit.

The average credit score in California was 754 last year, 24 points higher than the national average of 730. Mississippi, also for the second straight year, had the lowest average credit score, at 686.

California was only one of several Western states with stellar consumer credit scores. The Golden State was closely followed in the index by Oregon (750) and Hawaii (748), with Wisconsin and Connecticut rounding out the top five.

So what’s behind the trend? It may be a signal that the sun is rising in the west when it comes to a rebound in the economic outlook. San Francisco-based Citi California Pulse (a division of Citibank (Stock Quote: C)) found that more than half of Californians think 2012 will be better economically than 2011.

Better yet, only 17% of statewide survey respondents say that 2012 will be worse than 2011, and 66% of survey respondents say their own personal financial situation will improve this year. It seems then that Californians are ready to put those credit scores to good use.

Here is more proof from the survey that Californians are taking care of their financial business:

59% believe their debt will be lower in 12 months.

68% have cut down on credit card use.

60% have reduced the amount of money they owe.

57% have postponed the purchase of a major item, such as a car.

55% of people 18 to 34 have changed living arrangements to save money.

The Citi survey is as optimistic as they come, and while there’s really no hard and fast reason why Western states fare better than the rest of the nation in terms of credit health, in general, economic conditions (unemployment, consumer sentiment and home values) are holding up better in states like California than they are in states like Mississippi.