WASHINGTON, D. C. – The average credit score in Louisiana is 664, which ranks third lowest in the U.S., according to personal-finance website WalletHub, which analyzed the average credit scores of residents in all 50 states and just released its report on 2020’s States with the Highest & Lowest Credit Scores.
Here, WalletHub analyst Jill Gonzalez answers two key questions:
What are some of the biggest ways people’s credit scores can be hurt during the pandemic?
“The biggest ways people’s credit scores can be hurt during the pandemic are by missing payments and racking up debt. A missed payment on a credit account can stay on a person’s credit report for seven years, and can impact their credit score during that entire time,” said Gonzalez. “Many people have needed to borrow money during the pandemic, and an increased debt load and higher credit utilization on revolving accounts can also be detrimental to a person’s credit score.”
How could a second stimulus check help people’s credit scores?
“A second stimulus check could help people’s credit scores by making people less likely to borrow or miss a payment, thus avoiding increasing their debt load or putting negative information on their credit reports,” said Gonzalez. “We might even see a stimulus check lead to a big paydown of existing debts. In the second quarter of 2020, after people received their stimulus checks, there was one of the highest credit-card-debt paydowns in the last few decades. Decreasing one’s existing debt is a good way to raise one’s credit score long-term, because it makes it easier to both manage the debt and make on-time payments.”
