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Your financial history determines your credit score, that's to say, if you have been late in making your payments after having borrowed money, your average credit report score is bound to be low. There are three credit bureaus (Equifax, TransUnion and Experian) and they have their own interpretation of credit score. The scoring system in each is slightly different from the others and a person may have different scores for all the three bureaus. The Fair Isaac's FICO scoring system is considered the gold standard in credit scoring and this is the score people generally refer to when they mention credit score.

Obtaining an exact value as the average American's credit score can be slightly misleading, due to the various foreclosures and bankruptcies that can bring down the value. The number that will give us a better idea of the credit score average for Americans is the median credit score. This value is the exact middle value, meaning 50% of people have a lower score, 50% have a higher score. Now, the FICO median credit score is 723.

Average Credit Score by State

Here, we have broken down the average FICO credit score for each state for the year 2012. FICO scale scores run on a 330 to 830 scale and are subject to change each year.

StateAverage Credit Score
Alabama718
Alaska746
Arizona717
Arkansas741
California720
Colorado732
Connecticut727
Delaware728
District Columbia703
Florida716
Georgia731
Hawaii726
Idaho741
Illinois727
Indiana742
Iowa735
Kansas732
Kentucky719
Louisiana733
Maine735
Maryland737
Massachusetts717
Michigan688
Minnesota736
Mississippi719
Missouri738
Montana716
Nebraska750
Nevada724
New Hampshire727
New Jersey717
New Mexico707
New York720
North Carolina727
North Dakota735
Ohio720
Oklahoma742
Oregon735
Pennsylvania732
Rhode Island706
South Carolina725
South Dakota744
Tennessee720
Texas716
Utah721
Vermont721
Virginia717
Washington729
West Virginia719
Wisconsin730
Wyoming723

Improving Credit Score after Bankruptcy

Sometimes, when faced with insurmountable debt, bankruptcy is the only option. Though filing for bankruptcy will provide respite from surmounting bills and losses, A bankruptcy will remain on your credit report for a decade after you file for it. Repaying your bills is a big part of your credit score and bankruptcy shows there were some bills you never repaid. A direct consequence is that your credit record takes a beating. Thus restricting your ability to obtain credit at a good interest rate. One positive to emerge from the filing for bankruptcy is that as your debt load is reduced, which lands you in a better position to pay off your remaining debts and save money for further emergencies.

Many of you, who have been through bankruptcy, may find companies charging a price in exchange of erasing the bankruptcy from your credit report. I would suggest that you treat such offers with great caution because nothing can take off the bankruptcy from a credit report, as long as the bankruptcy information is accurate.

A perfect credit score is 850, which is most desired, but with a score of 720, you can still get a loan with lower rate of interest. If your score is below, that's when the interest rate begins to rise. The best way you can improve your ratings is by making monthly payments on time and having as less debt as possible. Moreover, make sure that you don't apply for too many credit cards so that you can resist the temptation of borrowing money and thereby hampering your chances to rebuild credit score.

The credit scores mentioned above are subject to change every year depending on the financial condition of the people of that state. A general rule of thumb is to not to worry about it. Remember, the higher your score, the more money you will eventually save. Having an above-average score is a vital factor in determining how much you can borrow and what you will pay for loans. Don't rely on just maintaining a credit record that hovers around the good score mark, because it will get increasingly hard to get your credit score back on track the longer you live with bad credit.