Alabama ranks 4th for largest credit score decreases amid financial challenges

GCM Staff Report
Posted 1/23/25

With financial improvement topping the list of popular New Year's resolutions, many Americans are beginning 2025 with concerns about their credit health.

Credit scores have declined across all …

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Alabama ranks 4th for largest credit score decreases amid financial challenges

Posted

With financial improvement topping the list of popular New Year's resolutions, many Americans are beginning 2025 with concerns about their credit health.

Credit scores have declined across all 50 states over the past year, according to a report released by the personal-finance website WalletHub. The report, titled "States With the Largest Credit Score Decreases," highlights regions where residents face the most significant financial setbacks.

Alabama ranked fourth in the nation for the largest drop in credit scores, reflecting a 0.77% decline between the third quarter of 2023 and the third quarter of 2024. The state's average credit score stood at 641 in Q3 2024, well below the national average, placing many Alabamians in a financially precarious position as they work toward better financial health.

Chip Lupo, a writer and analyst for WalletHub, shared practical advice for those looking to rebuild their credit.

"If your credit score is low or has recently dropped, the quickest and best way to improve your score is to use a credit card regularly and pay the balance on time and in full every month," Lipo said in the report. "Even if you have a credit card that you don't actively use, it will still gradually raise your credit score every billing period, as long as you keep the account in good standing. You should also strive to keep your credit utilization below 30% of your credit limit and work to actively pay down any long-term debts you have."

The WalletHub report used the latest data on consumer finances to rank the states. Alabama's decline is part of a broader trend seen nationwide, highlighting the importance of financial literacy and planning for consumers.

For more information on credit score changes across the U.S. and to see how your state compares, visit WalletHub's full report at https://wallethub.com/edu/states-with-the-largest-credit-score-changes/131551.