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Creditors may decide to sell or send unpaid bills to collections when consumers fall far enough behind. These collection accounts are often reported to the credit bureaus, and may remain on consumers' credit reports and affect their credit scores for years.
Perhaps unsurprisingly, the 10 states with the lowest average collection account balances also have high average FICO Scores. However, the relationship between overall average debt or income and total collection balances is less clear. The combined average total balance in collections can vary widely by state, with a low of $192 in Minnesota to a high of $1,152 in South Carolina.
As part of our ongoing look at debt in the U.S., Experian analyzed consumer credit data from August 2021 to see which states had the highest and lowest balances in collections. Our analysis looked at all 50 states in the U.S., exploring how total debt and credit score differed across the population. The average income statistics used here were reported by the U.S. Bureau of Economic Analysis as per capita personal income for the second quarter of 2021. Read on for our insights and analysis.
States With the Highest Collection Balances
A look at the 10 states with the highest average collection balance per person reveals several interesting findings:
- South Carolina ranks ahead of every other state with a $1,152 average total balance in collections. However, it doesn't have the highest average overall debt or the lowest average FICO® Score☉ .
- Wyoming and Nevada are outliers within the list as they both have average overall debt amounts over $100,000. Georgia ranks third, but with a much lower average overall debt of $86,964.
- Despite the high collection balances, every state in the top 10 had average credit scores in the range that's considered good. Wyoming and Florida were standouts with average FICO Scores of 722 and 707, respectively, and Nevada ranked third with an average score of 701. These states are the only ones among the 10 with average FICO Scores over 700.
- Wyoming, Nevada and Florida also have higher average incomes than most other states in this list.
- Georgia and Oklahoma are tied with an average FICO® Score of 693. However, average collection balances, overall debt and income are all higher in Georgia.
1. South Carolina
- Average total balance in collections: $1,152
- Average overall debt: $84,295
- Average income: $49,737
- Average FICO® Score: 693
2. Wyoming
- Average total balance in collections: $1,034
- Average overall debt: $102,371
- Average income: $63,589
- Average FICO® Score: 722
3. Texas
- Average total balance in collections: $1,019
- Average overall debt: $84,623
- Average income: $57,794
- Average FICO® Score: 692
4. Oklahoma
- Average total balance in collections: $903
- Average overall debt: $70,490
- Average income: $51,564
- Average FICO® Score: 693
5. Nevada
- Average total balance in collections: $887
- Average overall debt: $105,113
- Average income: $55,577
- Average FICO® Score: 701
6. Georgia
- Average total balance in collections: $785
- Average overall debt: $86,964
- Average income: $54,442
- Average FICO® Score: 693
7. Alabama
- Average total balance in collections: $783
- Average overall debt: $72,062
- Average income: $48,133
- Average FICO® Score: 691
8. Louisiana
- Average total balance in collections: $769
- Average overall debt: $75,525
- Average income: $53,281
- Average FICO® Score: 690
9. West Virginia
- Average total balance in collections: $757
- Average overall debt: $60,945
- Average income: $46,343
- Average FICO® Score: 699
10. Florida
- Average total balance in collections: $743
- Average overall debt: $85,153
- Average income: $58,441
- Average FICO® Score: 707
States With the Lowest Collection Balances
Most of the 10 states with the lowest average collection balance have a few things in common, but there are also several outliers:
- Minnesota has the lowest average balance in collections ($192) and the highest average FICO® Score (742) among the top 10 states.
- Oregon, at $58,544, is the only state in the top 10 with an average income under $60,000.
- Rhode Island, at 723, is the only state on this list with an average FICO® Score under 730.
- Average overall debt amounts range from $85,296 (North Dakota) to $119,579 (Massachusetts). But there's no clear correlation between average debt and total balance in collections.
- Oregon and Washington have the same average balance in collections ($274) and similar average FICO Scores—731 and 734, respectively. However, Washington has much higher average overall debt and average income amounts ($134,855 and $70,441 versus $112,324 and $58,544).
1. Minnesota
- Average total balance in collections: $192
- Average overall debt: $100,165
- Average income: $64,674
- Average FICO® Score: 742
2. Massachusetts
- Average total balance in collections: $237
- Average overall debt: $119,579
- Average income: $81,995
- Average FICO® Score: 732
3. Vermont
- Average total balance in collections: $257
- Average overall debt: $85,675
- Average income: $60,396
- Average FICO® Score: 736
4. South Dakota
- Average total balance in collections: $258
- Average overall debt: $85,616
- Average income: $62,446
- Average FICO® Score: 733
5. Oregon
- Average total balance in collections: $274
- Average overall debt: $112,324
- Average income: $58,544
- Average FICO® Score: 731
5. Washington
- Average total balance in collections: $274
- Average overall debt: $134,855
- Average income: $70,441
- Average FICO® Score: 734
7. Hawaii
- Average total balance in collections: $294
- Average overall debt: $136,802
- Average income: $60,807
- Average FICO® Score: 731
8. North Dakota
- Average total balance in collections: $298
- Average overall debt: $85,296
- Average income: $65,914
- Average FICO® Score: 733
9. New Hampshire
- Average total balance in collections: $299
- Average overall debt: $98,553
- Average income: $68,126
- Average FICO® Score: 734
10. Rhode Island
- Average total balance in collections: $334
- Average overall debt: $94,264
- Average income: $61,624
- Average FICO® Score: 723
More Debt Doesn't Align With Higher Collection Balances
Perhaps counterintuitively, consumers in the 10 states with the lowest collection balances tended to have more overall debt than those with the highest collection balances.
There isn't enough data to draw a firm conclusion, but one explanation could be that collections are more related to personal cash flow or debt-to-income (DTI) ratios than total debt balances.
For example, consumers may have to take out large mortgages to afford homes in certain states, which leads to more overall debt. But those areas may also offer better-paying jobs, and the extra income allows them to more easily cover the higher monthly payments.
Except for Wyoming, none of the states with the highest collection balances had an average income over $60,000. On the other hand, every state except Oregon on the list of states with the lowest collection balances had an average income over $60,000.
Those With Better FICO Scores Tend to Have Less in Collections
A less surprising insight: Higher collection balances tend to correlate with lower FICO Scores.
Having an account sent to collections can hurt your credit scores. And often, the collection account is preceded by several late payments that have already dinged your credit.
Almost every state among the top 10 with the highest collection account balances had an average FICO® Score under 700. But almost every state within the lowest collection account balance group had an average FICO® Score over 730. For context, the average FICO® Score in the U.S. was 710 in 2020.
Both 699 and 730 fall within the good score range for FICO Scores, which is defined as 670 to 739. But lenders can also decide what they consider to be good or bad credit. For many types of loans, including mortgages and auto loans, a score in the low- to mid-700s could lead to better interest rates and terms than a score in the high 600s.
Paying off a collection account won't remove it from your credit history—the removal timeline depends on when the account first went past due. But newer credit scoring models may ignore paid collection accounts when determining a score.