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Average Credit Score & Debt in Louisiana

The average VantageScore in Louisiana is 661 and the average household debt is $39,740.

The home of Cajun and Creole cooking, Mardi Gras, and Tabasco sauce appears to manage debt well, but seems to struggle with credit, which makes Louisiana an interesting case study in the relationship of one to the other.

Louisiana experiences fiscal problems both personally and at the state level. Louisiana receives more in federal funding than it generates in state tax revenue. [1] Pew: Arizona, Louisiana among seven states that receive more federal dollars than state tax revenue https://www.thecentersquare.com/national/pew-arizona-louisiana-among-seven-states-that-receive-more-federal-dollars-than-state-tax-revenue/article_eca6d34a-ec4e-11e9-a230-e7e35e9024ac.html In 2017, 43.7 percent of Louisiana’s revenue came from the federal government. [10] Fiscal 50: State Trends and Analysis https://www.pewtrusts.org/en/research-and-analysis/data-visualizations/2014/fiscal-50#ind1

This article will explore the effects that economic factors have on Louisiana’s relationship with credit and debt.

Key statistics

Contents

Louisiana’s Credit Score Over Time

Year Average Vantage Score - LA
2015 645
2016 690
2017 663
2018 653
2019 654
2020 661

Louisiana’s VantageScore consistently trails the national average. At 661, it is a mere one point into the range of “Good.” Louisiana’s score has fluctuated from the high end of “Fair” to the low end of “Good” for the past six years. Additionally, out of the ten U.S. cities with the lowest credit scores, three are in Louisiana: Monroe, Alexandria, and Shreveport. [2] Welcome to Louisiana: Home of the Low Credit Score https://www.grandlawfirm.com/blog/2016/february/welcome-to-louisiana-home-of-the-low-credit-scor/

How Credit Scores in California Compare to Other States

Year Average Vantage Score - LA Average Vantage Score - US
2015 645 672
2016 690 726
2017 663 678
2018 653 682
2019 654 684
2020 661 690

At 661, Louisiana has the second lowest VantageScore in the United States. The only state with a lower score is Mississippi at 658. All of the states with VantageScores in the 660-670 range are southern states (Georgia and Alabama at 665, Texas at 666, South Carolina and Oklahoma at 667, and Arkansas at 668).

Debt in Louisiana

Year Average Household Debt - LA Average Household Debt - US
2003 22,410 33,430
2004 24,190 37,290
2005 20,390 40,650
2006 25,870 45,410
2007 29,570 50,170
2008 31,580 52,010
2009 31,370 49,820
2010 30,980 47,410
2011 32,240 47,790
2012 32,760 47,020
2013 32,560 45,310
2014 33,490 45,710
2015 34,560 46,000
2016 35,220 46,950
2017 36,720 48,800
2018 38,160 50,090
2019 39,740 51,580

Household debt in Louisiana is significantly lower than the national average. As we break this down further, however, we’ll discover that debt in Louisiana is a bit more complicated than a graph makes it seem. For example, just because the amount of debt is lower than the national average doesn’t mean there isn’t a problem.

Louisiana’s residents have one of the lowest median income levels in the United States. In 2019, the median income in Louisiana was $48,000 a year, the fourth lowest in the country. [3] Louisiana ranks 2nd in the country for highest credit card debt https://louisianaradionetwork.com/2019/12/04/louisiana-ranks-2nd-int-he-country-for-highest-credit-card-debt/ In some instances, this can limit the amount of debt you can take on—a mortgage, for example—but it can also limit your ability to pay off the debt you have.

Mortgage Debt

Year Average Mortgage Debt - LA Average Mortgage Debt - US
2003 13,180 23,740
2004 14,330 26,590
2005 10,550 29,230
2006 15,200 33,400
2007 17,920 37,250
2008 19,410 38,490
2009 19,510 36,810
2010 19,580 35,010
2011 19,880 34,200
2012 19,870 33,230
2013 19,510 31,630
2014 19,640 31,520
2015 20,030 31,330
2016 19,950 31,590
2017 20,820 32,940
2018 21,580 33,680
2019 22,550 34,790

Mortgage debt in California is far above the national average. Additionally, between the years of 2004 and 2007, it outpaced the national average. Of course, the Great Recession of 2008 was the great equalizer, where the slope of the curve starts to once again resemble its lower national average counterpart.

Skyrocketing real estate prices keep California’s stats above the average for the rest of the country. Since the real estate bubble burst in 2008, California’s real estate market has rebounded impressively. In 2016, the median price of an existing single-family home in California was $526,580, double the amount just after the recession hit. [4] Cost of Living in Louisiana https://www.bestplaces.net/cost_of_living/state/louisiana According to Experian, California had the second highest mortgage debt in the country after Washington, D.C. [5] Louisiana Credit Card & Personal Finance Statistics https://www.creditcardlocal.com/states/louisiana/

Credit Card Debt

Year Average Credit Card Debt - LA Average Credit Card Debt - US
2003 2,390 2,960
2004 2,470 3,040
2005 2,370 3,060
2006 2,290 3,170
2007 2,530 3,490
2008 2,630 3,670
2009 2,420 3,370
2010 2,230 3,050
2011 2,190 2,950
2012 2,170 2,850
2013 2,050 2,710
2014 2,090 2,730
2015 2,180 2,800
2016 2,270 2,930
2017 2,440 3,100
2018 2,530 3,220
2019 2,690 3,390

Credit card debt is another area where Louisiana is significantly and consistently below the national average. When you see a state where both the level of debt and the average credit score are below the national average, the common thread is delinquencies.

Louisiana ranks 32nd in the nation in average credit card debt balances. However, Louisiana also ranks 4th in the nation in credit card delinquencies. Louisiana’s delinquency rate is .76 percent while the national average is .57 percent. [5] Louisiana Credit Card & Personal Finance Statistics https://www.creditcardlocal.com/states/louisiana/ The problem for Louisiana residents isn’t just how much they owe: When your debt is coupled with a lower than average median income, it makes it harder to chip away at that debt, especially at the interest rates that credit cards carry. This is referred to as “debt burden.”

Louisiana has the second highest debt burden in the country, exceeded only by New Mexico. In Louisiana, it would take 17 months to pay off a household’s average credit card balance with its median income. In New Mexico, it takes 18 months. [6] This state is the most burdened by credit-card debt https://www.marketwatch.com/story/this-state-is-the-most-burdened-by-credit-card-debt-2018-12-10

Car and Auto Debt

Year Average Auto Loan Debt - LA Average Auto Loan Debt - US
2003 2,950 2,960
2004 3,170 3,040
2005 3,150 3,240
2006 3,820 3,360
2007 3,980 3,360
2008 4,030 3,310
2009 3,740 3,030
2010 3,590 2,950
2011 3,710 3,050
2012 4,030 3,270
2013 4,230 3,420
2014 4,650 3,720
2015 5,100 4,070
2016 5,390 4,340
2017 5,550 4,520
2018 5,760 4,700
2019 5,950 4,850

We’ve shown that, while the graphs look promising for mortgage and credit card debt, the numbers conceal some underlying problems. However, Louisiana’s auto loan debt statistics are more transparent. Since 2006, Louisiana’s auto debt has been consistently above the national average.

Louisiana has a comparatively low cost of living compared to other states. Its cost of food, healthcare, housing, and utilities are all below the national average. [4] Cost of Living in Louisiana https://www.bestplaces.net/cost_of_living/state/louisiana The major exception is transportation. While this doesn’t address the cost of a car directly, it does address the cost of owning, driving and maintaining one. Louisiana’s transportation costs are more than 8 percent higher than the national average.

These additional costs coupled with rising vehicle prices and extended auto loan terms lead to the delinquencies that can torpedo credit scores. Alabama (9 percent), South Carolina (8 percent), Texas, Mississippi, New Mexico, and Louisiana (all at 7 percent) lead the nation in auto loan delinquency rates.

Auto loan delinquencies are particularly concerning because when a delinquency escalates to a repossession, a person loses more than a way to get from point A to point B. If the inability to get to work leads to the loss of a job, that affects a person’s ability to participate in the economy.

Student Loan Debt

Year Student Loan Debt - LA Student Loan Debt - US
2003 990 1,060
2004 1,550 1,440
2005 1,690 1,610
2006 1,970 1,970
2007 2,190 2,250
2008 2,560 2,670
2009 2,910 3,010
2010 3,130 3,370
2011 3,390 3,620
2012 3,750 4,000
2013 4,030 4,250
2014 4,340 4,490
2015 4,500 4,660
2016 4,810 4,920
2017 5,020 5,130
2018 5,360 5,390
2019 5,580 5,510

Unsurprisingly, Louisiana’s student loan debt issues closely follow the national average. That’s unfortunate because the national average for total debt balance just keeps climbing. Slightly less than half (48 percent) of Louisiana’s college graduates have student loan debt. [7] Louisiana borrowers average $26,808 in student loan debt https://neworleanscitybusiness.com/blog/2019/09/19/louisiana-borrowers-average-26808-in-student-loan-debt/ The state also has one of the lowest percentages of the population with bachelor's degrees at 23 percent. Mississippi is the only state lower at 21.9 percent. This may indicate graduates are leaving Louisiana for states with higher median incomes in order to make paying off loans more achievable.

Another contributing factor to Louisiana’s student loan debt problem is low state investment in higher education. State funding for higher education has been cut by more than 40 percent since 2008, more than any other state for that period of time. [8] Public college access in jeopardy for low-income students as tuition rises: report https://www.nola.com/news/education/article_2bc62fc4-5355-5fa2-aa17-ddd3112a9249.html In this same time period, the cost of college tuition at four-year Louisiana schools has doubled. [9] Unkept Promises: State Cuts to Higher Education Threaten Access and Equity https://www.cbpp.org/research/state-budget-and-tax/unkept-promises-state-cuts-to-higher-education-threaten-access-and

Sources

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