Experian’s 12th annual State of Credit report tracks VantageScore credit scores, which were developed by the credit bureaus Experian, Equifax, and TransUnion and range from 300 to 850—the same range as FICO credit scores. Overall, U.S. VantageScores increased to 695 on average—up from 688 last year and 682 in 2019, prior to the COVID-19 pandemic.

While scores overall rose, wide state-by-state and regional disparities remain. Consumer credit scores in the South, for instance, continue to lag those in the Midwest and New England. Residents of Mississippi had the lowest average credit scores this year, at 666. Minnesota residents once again had the highest average credit scores, at 726, according to the report.

The nationwide jump was due, in part, to fewer missed payments among consumers, as well as lower credit utilization rates and lower balances. The average credit card balance is now $5,525, lower than the pre-pandemic average of $6,494 in 2019, Experian reported. 

Typically, credit scores are based on consumers’ account payment history, number of accounts open, credit history, and current debt levels. Factors such as age, salary, employment history, race, and where a consumer resides are not measured. 

The recent increases in credit scores, both VantageScore and FICO, could have a big impact on consumers’ current and long-term finances. “From housing and employment to health care and education, creditworthiness can be leveraged to improve our overall quality of life,” said John Hope Bryant, founder and CEO of Operation HOPE. The financial literacy nonprofit partnered with Experian this year to produce the HOPE Financial Wellness Index, which will be updated regularly. 

Just over one in four consumers with lower credit scores under 550 have reported trouble renting an apartment, while 22% of those with low creditworthiness have been denied a cell phone plan, according to a Credit Sesame survey fielded late last year. 

In fact, even moderate upward bumps to credit scores can put money back into consumers’ pockets. For example, consumers who bump up a subprime credit score of 660 by about 35 points, to the national average of 695, could save an average of $301 in annual interest charges, according to an analysis by bill-pay service Doxo.

Consumers who are looking to improve or maintain their credit scores should check their credit report regularly, said Rod Griffin, senior director of consumer education and advocacy at Experian. “Understanding the information included in your credit report and how it impacts your credit scores is one of the best ways to protect your financial health,” he added.   

Paying down debt and making on-time payments generally have the biggest impact on people’s credit scores, but consumers can also sign up for programs like Experian Boost and UltraFICO. Experian’s program allows consumers to add their payment history on utility, phone, and cable TV bills to their credit report, while UltraFICO links checking and savings accounts so that positive account balances can be taken into consideration.