Credit score by political allegianceIt's not just political philosophies that define the differences between Republican-leaning "red states" and Democrat-leaning "blue states" -- and some of those differences may surprise you.

Blue states, for example, have higher average gas prices -- but because red state citizens own less-efficient vehicles and drive them more, high gas prices are hurting them to a greater degree. The states with the most teen pregnancies are mostly among the conservative red, whereas those with the least are mostly blue. And when it comes to credit scores, blue states are where the smart money is.

That's what the folks at CreditKarma.com figured out after examining credit data from TransUnion, one of the three major credit bureaus. Comparing credit scores state-by-state, they found that the average score in blue states is 667 -- 16 points higher than the 651 average in red states.

Why the differences? "Traditionally, Southern states have lower average FICO scores than any other region of the country," says John Ulzheimer, president of consumer education at SmartCredit.com and a Georgia resident. "It's not because we tend to vote Republican, it's because we're in [more] credit card debt and have more negative information on our reports than other states."

Actually, Credit Karma's research shows that residents of blue states carry more credit card debt on average: $6,200.70 compared to $5,855.86 in red states. But Ulzheimer says the issue isn't gross credit card debt; it's credit card debt in relation to credit card limits.

"If I have $10,000 in credit card debt, but $100,000 in limits, I'm 10% utilized. If you have $5,000 in credit card debt but a $10,000 limit, you're 50% utilized and will likely have a lower score." Blue state residents are more likely to have more credit cards that are unused, or higher credit limits overall.

What 16 Points Means to Your Budget

Still, it's only a 16 point difference -- how big a deal could that be? Well, it may not sound like a lot, but it translates into substantial additional costs to those consumers every year, says Ken Lin, CreditKarma founder and CEO.

"On the credit spectrum, it could be a few hundred dollars per consumer when you average it all," he says -- money you lose due to the higher interest rates you're charged when you're classified by lenders as a bigger risk.

Want to put that money back in your pocket? Here are two lessons for those of us in red states (or with poor credit no matter where we live) to take from our blue state neighbors:

• Don't fear credit. Lin notes that those in blue states are more likely to leverage financial services tools, and you have to use credit to have credit. Otherwise, you're likely to have what the credit bureaus would refer to as a "thin file" -- no track record to show you're responsible. To build a history, you need a credit card. Look for one with no annual fee and a low interest rate. Then charge a little bit each month and pay it off every billing cycle, on time.

Understand the impact. As I noted, Lin says this 16-point difference could equate to a hundreds of dollars a year. But that really depends on where your score falls on the spectrum. If your credit score is, say, 570, 16 points won't make much difference one way or the other because it isn't likely to push you into a better score range, and you're already close to rock bottom. If your score is 700 or above, the same applies, but for the opposite reason: You're likely getting great terms, and a mere 16 points in either direction won't do much to change that. It's the group whose credit scores fall between 600 and 700 that is most affected by those apparently small differences.

With Arielle O'Shea

Increase your money and finance knowledge from home

Introduction to Retirement Funds

Target date funds help you maintain a long term portfolio.

View Course »

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

Add a Comment

*0 / 3000 Character Maximum

270 Comments

Filter by:
elainemoiser

The blue state must be really lucky then for having a low interest on their credit but how about those in the red state where most of the people are considered as less fortunate and even some can't really afford. Have you ever think that It's probably tormenting for the red state since they are leave with no choice but to have that credit loan just to aid them on their business and earn a living.

Elaine @ http://www.correctmyscore.com/

June 16 2012 at 1:59 AM Report abuse rate up rate down Reply
Setanta

so what happened to pelosi/maloney's contracepting poster child ? simply proves the morons have the attention span of amoebas and get notified when and what to bang-
like i posted back to one drone claiming ms flewkes flucks whatever was defamed....yeah,imagine your neighbours daughter knocking on your door and shaking a can asking for a 10dollar donation so she can answer her booty call while over at school---WHAT WOULD YOU THINK of that ?
bunch of buzzards that ARE NOT ANY MAJORITY they simply get preference on this line and on the mediyuuh and certain mediyuuh outlets should have been bankrupted by now as well as these same libturds and wads DO NOT PATRONIZE THEIR OWN MOUTH PIECES.

it's very late in the game and let's make sure THEIR PLANS NEVER MATERIALIZE.

LOL flukes was last seen in spain with her lib 1% boy friend...i wonder WHO PAYS ?

March 20 2012 at 10:51 PM Report abuse +1 rate up rate down Reply
democracks0

ILLINOIS THE SINKHOLE STATE

March 20 2012 at 9:14 PM Report abuse +3 rate up rate down Reply
democracks0

IT'S ELECTION DAY IN ILLINOIS AND DEMOCROOKS ARE OUT IN FULL FORCE PARTICULARLY IN CROOK COUNTY. VOTER FRAUD IN FULL MODE TODAY. ACORNS A PLENTY!!!

March 20 2012 at 8:56 PM Report abuse +4 rate up rate down Reply
Setanta

of course the morons will NOW teach all about good CREDIT as that's all the !@#$$#@!s KNOW-
tax SPEND/SPEND and tax and OPERATE AT A DEFICIT.
and being they're ALL MORONS with their newspeak and BULLspit speech the same way afghanistan IS the good war
CREDIT IS GOOD.
they're LIVING PROOF.

March 20 2012 at 8:24 PM Report abuse +4 rate up rate down Reply
democracks0

EVAN WAS HERE VOTING COMMENTS DOWN SIGNING IN UNDER HIS MULTIPLE SCREEN NAMES.

LMAO

WHAT A SIMP!!!

March 20 2012 at 4:13 PM Report abuse +7 rate up rate down Reply
shepfbm

It might have something to do with the income levels of the blue states which are much higher than the red states. You should compare apples to apples. California and New York are states that are notoriously in financial disaster while Iowa and Texas are not. Why do you think that is?

March 20 2012 at 2:11 PM Report abuse +1 rate up rate down Reply
1 reply to shepfbm's comment
Setanta

you need to get THOSE COLOR CODES TOGETHER -
TX is RED etc
and any and all municipalities with diM kontrol are destroyed regardless of what income a person pulls in after taxes and the increased costs of living in both cali and ny.
dems are and remain the scum of the earth.

March 20 2012 at 8:21 PM Report abuse rate up rate down Reply
Nick

It is amazing. Folks will dig up the most obscure data and divine a reason for it. all the time ignoring that the majority of the bankrupt or soon to be bankrupt states, are alas blue.

March 20 2012 at 2:05 PM Report abuse +1 rate up rate down Reply
rfwestex

Yeah water runs uphill and Charlie Sheen practices abstinence.

March 20 2012 at 1:25 PM Report abuse +1 rate up rate down Reply
Jetncat

And yet the biggest blue states NY, california and Ilinois are all broke? Go figure?

March 20 2012 at 1:17 PM Report abuse +1 rate up rate down Reply