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Why Does Minnesota Have the Best Credit Scores in the US?

It’s known as the land of 10,000 lakes, but Minnesota can boast another claim to fame: The Gopher State is home to residents with the highest credit scores in the country.

Experian’s recent State of Credit survey found that Minnesotans have an average credit score of 709—well above the national average of 675. (The two states in second and third place were Vermont and New Hampshire, with average scores of 702 and 701, respectively.)

Minnesota’s perch atop the credit score pile can be attributed to a number of factors, including the fact that Minneapolis, its biggest city, also comes out on top as the metropolitan area with the highest credit scores in the country. Experts say that residents of the state in general have a conservative approach to managing their money—which makes them more likely to pay their bills on time and keep their debts to a minimum.

Minnesotans Pay Their Bills on Time

“There’s a Midwestern mentality here,” says Grant Meyer, a certified financial planner in Bloomington, Minnesota. “Minnesotans prioritize saving and paying down debts, like credit cards and mortgages. It’s just something that’s been passed down through the generations.”

The data bears out Meyer’s analysis. It’s not that Minnesotans don’t use credit cards—residents, on average, carry 2.97 cards per person. But they rarely make any late payments on those cards, averaging a scant 0.2 late payments per billing cycle. And only 20% of residents let any of their accounts go 90 days past due. That’s impressive, considering that the national average is 36%.

A big factor in determining credit scores is the credit utilization ratio, or the amount of credit a person uses relative to the amount of credit available to them. Experts say you should keep your utilization ratio under 30% for a strong credit score and the average utilization ratio in Minnesota at 26%. Residents also maintain a lower credit card balance of $5,911 than the national average, which stands at $6,354.

Minnesota’s Strong Economy Plays a Big Role

Of course, it helps that Minnesota offers a robust economy that provides plenty of well-paying jobs for its residents—allowing them to earn enough money to pay their bills on time, says Meyer.

The state’s unemployment rate in December, the most recent month data was available, stood at 3.1%—a full percentage point lower than the national average of 4.1%. Industries like manufacturing are especially booming: In a recent survey of that state’s manufacturers, 95% of respondents said they expect their production levels to remain the same or increase in 2018.

And while the Twin Cities area is home to 17 Fortune 500 companies and attracts a number of businesses in healthcare and biotechnology, it’s not the only part of the state that is booming. The central Minnesota region, which includes St. Cloud, is the fastest-growing in the state, thanks to a number of businesses choosing to locate in that area. The region has seen a 16.8% increase in job growth since the year 2000.

“The bottom line is that there’s a large segment of Minnesota’s population that has a strong work ethic and wants to be responsible with money,” says Jason Kley, president of the Financial Planning Association of Minnesota. “Overlay that with the strong economic conditions in the state, and it’s a formula for success.”

Editor’s note: Credit scores mentioned in this piece are VantageScore.