Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Texas has the Lowest Credit Score in the Country

Texas has the Lowest Credit Score in the Country

On average, Texas has the lowest credit score in the countryThe score is a whopping 651 while the country has an average score of 692.  What does this mean for Texas buyers?  This means you're a higher risk and loan programs in Texas are different from other states. Look at this pretty chart. 

 To put things into perspective, Texas ranks 41st out of 50 states in home ownership.  This is because with lower scores, it's harder to obtain a mortgage.  Before the subprime fiasco that we're currently going through, a buyer with a 550 credit score could probably obtain 100% financing with higher than average interest rates, like 9%.

With the way the mortgage industry is going, the cut off of credit scores is now getting higher again.  Though FHA doesn't look at credit scores, conventional mortgage companies do, and many want a minimum of a 600 score, if not 620.  If the "average" in Texas is 651, that leaves you very little room for mistakes on your credit.

Average also means, half the people have higher scores and half the people have lower scores.  If half the people have lower scores, and scores can go down into the 300's, that's not a good number. Texas has over 20 million people, so if approximately half those people can't obtain a mortgage, it's easy to see why we're ranked 41st in the country.

Another interesting fact that I found is that 23% of Texans lowered their credit score up to 50 points from January through June 2007.  With an average at 651, I can see that score only getting worse if people don't start paying their bills and looking at credit in a different and better way.

What I find very interesting is that it seems that the higher scores are based in colder states and the lower scores are in warmer states.  I guess when it's colder, it's less tempting to go out on a shopping spree and then not pay those bills.

I would welcome the opportunity to help you buy a house, but you have to do your part as well because your credit score is in your hands.

Remember, I work all of North Dallas County and Collin County including Richardson, Plano, Allen, Frisco, Carrollton, Garland, Rowlett, McKinney, etc... my car will take us anywhere you need to go!! 


Comment balloon 9 commentsDonna Harris • April 24 2008 02:23PM


What this really means is that we should have closed the borders a long time ago.  The ones on the north and the ones on the south. Just Jokeing. :)
Posted by Don Eichler (Eichler Properties) about 12 years ago
The credit score may be ugly, but all the women are beautiful! (Jerry Jeff Walker)
Posted by Associate Broker Falmouth MA Cape Cod Heath Coker, Heath Coker Robert Paul Properties Falmouth MA ( & about 12 years ago

Don, Cute... and true to an extent because they're the ones not buying which is helping to make Texas rank #41 in home ownership.

Heath, Just like National news uses some unrealistic benchmarks to get their points across, Jerry's song did the same thing... ;)

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - about 12 years ago
Everthing is bigger in Texas, Even the debt.
Posted by Rod Rich, Atlanta- Associate Broker (Atlanta Communities Real Estate) about 12 years ago
Rod, Yes, especially the debt!  They need to be able to buy their big cars and get their big hair done, and if they can't pay it, plastic is the way to go (said tongue in cheek).
Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - about 12 years ago
Wow Donna that is dramatic. I never seen those figures before, quite a surprise. It shows that financial education on the high school and college levels is called for. When I was managing a several managers at a firm, I was shocked to see their lack of knowledge on the topic. I could only think that these were the same people handling the finances of my location.
Posted by Frank Schulte-Ladbeck (Frank Schulte-Ladbeck Professional Real Estate Inspections) about 12 years ago

That is a very interesting tid bit.  I don't doubt that the average score is lower though.  People sometimes don't realize what they are doing to themselves.  I spoke with a couple of people today, content on living with bad credit.  It's like any bad habit in life.  Unless you're ready to change, it won't happen.  Most people become motivated at one point (when they want to buy a home or a car) but they slip back into the same old drudgery that got them there.  Education is key.  When people lack the fundamental knowledge of not just the importance of credit, but how it works, and how it may affect you, you'll never be able to hit the upper echelon of credit scores.  Like my favorite cartoons of the 80's...GI JOE... "Knowing is half the battle!". 

Posted by James Jeter, James Jeter (Cardinal Financial Company, Limited Partnership) about 12 years ago

Because I know that credit scores are based on how much credit you have.....I have to wonder if it's just that people in the south aren't as likely to Charge, charge, charge.

I know people with very low credit scores. They make very good money, pay cash for everything they want or need and are financially stable. I'd loan them money in a heart beat even if the banks would not because I know the truth of their financial situation. I trust them more than someone that thinks nothing of having 10 credit cards. I don't care if that person is paying their credit cards on time. The point is that our current society puts too much emphasis on credit and not enough on financial responsibility.

Without the statistics added in of how much other states rack up in credit card debt....I'd say these stats are misleading.

Posted by Cheri Smith, Realtor Prudential Gary Greene (Prudential Gary Greene, Cypress TX) about 12 years ago

Texans are optomists.... which translates to higher debt as a result of their comfort knowing that there will always be jobs here so they shouldn't have trouble paying back what they borrow.

I am sure that immigration plays a part. Many of our newer residents do not understand how our credit system works.... I see it often.


Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) about 12 years ago