A new report out is bad news for not just residents of Memphis, but all Tennessee residents. The new report indicates just how far credit scores have fallen for Tennessee residents during the last year. A bad credit score can have many negative effects on a person's life, including making it harder to get approved for loans, such as a mortgage or a car loan. Usually a bad credit score occurs when someone racks up a large amount of debt, sometimes credit card debt, and is unable to pay it off.
According to the report, by credit research company Credit Karma, the average credit score for a resident of Tennessee in January 2013 is 636, the ninth-worst score of any state. That is a drastic decline from the average score of 692 one year prior. The average score for Memphis residents was 638, according to credit reporting agency TransUnion, which is reportedly one of the worst average scores for a major city in the United States.
In a bit of good news, however, Tennessee residents had the eighth-lowest average amount of credit card debt of any state in the country, at $4,880. Tennessee residents also reduced their mortgage debts in the last year, down from $129,481 in January 2012 to $123,921 this January. But average student loan debt increased by 20 percent.
While it's good that Tennesseans are reducing their debt loads in many aspects, a bad credit score can make it difficult to obtain more credit if borrowing is needed. To improve your credit score, you need to make on-time payments of your debts.
Source: Memphis Business Journal, "Average Tennessean's credit score plummeted from 2012 to 2013," Cole Epley, Feb. 13, 2013