Arkansas Residents Rank Last On Credit Scores

This just in from Attorney General Dustin McDaniel's office: According to at least one nationwide study, Arkansas residents rank last when it comes to credit scores. The study reveals that the national credit score average is 666, while the Arkansas average is only 636. Attorney General Dustin McDaniel today released this consumer alert offering advice for Arkansas consumers on how to improve low credit scores

Credit scoring is a system used by the major credit bureaus to provide a summary of a consumer’s credit history. Many creditors make the decision to extend credit and set credit terms based on an applicant’s credit score. While different credit bureaus have different credit scoring systems, all are influenced by a consumer’s bill-paying history, the number and type of accounts a consumer has, late payments, collection actions, outstanding debt, debt-to-income ratio, and the age of existing accounts. Generally, consumers with higher credit scores are more likely to receive higher credit allowances and better credit terms.

A low credit score may present several disadvantages for consumers, including difficulty obtaining a loan or higher interest rates on borrowed money. However, a low credit score can be improved. Attorney General McDaniel offers the following tips:

Review your credit report. Get a copy of your credit report so you are aware of what creditors will see. A free copy of your credit report is available at www.annualcreditreport.com or you can call toll free: 1-877-322-822. Errors or inaccurate information can impact your ability to get credit and affect your finance rate.

Clean up your credit report. If a credit report contains incorrect or obsolete information, consumers have the right to have it removed. Contact the credit reporting company in writing, specifically outlining inaccurate information. Maintain copies of all correspondences for your personal records.

Resolve delinquent accounts and keep up with payments. Payment history can constitutes 35 percent of an overall credit score; outstanding debts can comprise 30 percent. Focus on keeping your payments current and paying off debts in a timely fashion.

Stop using your card. Keeping your credit cards “maxed out” will negatively impact an already damaged credit score.

Keep older accounts. Credit history length can constitute 15 percent of a credit score. Do not completely close out older but seldom-used credit card accounts, as keeping older cards without incurring additional charges may improve your rating.

Lower balances. Make an effort to keep credit balances as low as possible. Your credit score takes into account the amount of credit available compared with how much credit actually utilized. The less you're using, the better for your score

Get professional help. If you are overwhelmed by your credit situation, seek professional assistance.

For more information, contact the Consumer Protection Division of the Attorney General’s Office at Suite 200, 323 Center Street, Little Rock, AR 72201. The office can be reached by calling 682-2341 (Little Rock) or 1-800-482-8982.