From the east coast to the west coast, Americans seem to have pretty good credit scores overall. However, Minnesota residents, on average, tend to have the highest ones.

The average credit score in the midwestern state is 726 as of the first quarter of 2023, according to WalletHub's November report. That's the highest score out of all 50 states and Washington, D.C.

Mississippi residents have the lowest average credit score at 673, per WalletHub's analysis. New Yorkers and Californians fall somewhere in the middle with average credit scores of 707.

Many underlying factors can contribute to the variation in scores across the U.S., including varying income levels, educational opportunities, employment rates and other economic conditions, which can all impact how people manage their credit.

"Minnesota tends to score well (and better than Mississippi) on many economic indicators, and the average credit score reflects the generally stronger economy in Minnesota," Thomas Hanson, an assistant professor of finance at Minnesota State University Moorhead, says in WalletHub's study.

Here are the states with the highest and lowest average credit scores, according to WalletHub.

Why you don't need a 'perfect' credit score

Your credit score will fall between 300 and 850, according to FICO's scoring model. Lenders use it as a way to figure out how well you manage your debt and how risky it would be to lend money to you. Although the 673 average score in Mississippi is low compared with other states, it would still qualify as a good score, according to Experian.

Here are the credit score ranges Experian designates as poor, fair, good, very good and exceptional.

• Poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Exceptional: 800 to 850

While a "perfect" 850 score probably won't get you much more than "bragging rights," those with credit scores above 700 typically qualify for the best interest rates and lending terms, Christina Roman, Experian's consumer education and advocacy manager, tells CNBC Make It.

Having a high score can help you save money in the long run. That's because a high credit score signals to lenders that you're a responsible borrower, so they're more likely to give you the most favorable interest rates on your mortgage or credit card.

"With a prime credit score, you may be able to access better offers, including low interest rates and no fees on credit cards," Roman says. "Consumers with subprime credit scores are usually required to pay larger deposits and may be faced with higher interest rates."

But don't panic if your credit score isn't where you'd like for it to be. In general, financial experts say you can improve your credit score by consistently paying your bills on time and keeping your outstanding balances low.

Knowing how your credit score is calculated can help you understand how to improve it, Roman says. Missed or late credit card payments can cause your score to take a hit since your payment history accounts for 35% of how your credit score is calculated.

"One of the best things you can do to improve your financial health and credit is to get engaged," Roman says. "Don't be afraid to look at your credit report and understand what's there."  

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