Experian’s second-annual State of Credit study reveals Midwesterners most mindful of their money and Southerners continue to struggle
Company offers insights into Americans’ credit and debt management to help consumers improve their financial standing
Costa Mesa, Calif., Oct.11, 2011 —Experian®, the leading global information services company, today released its second-annual State of Credit list of cities with the highest and lowest credit scores. Wausau, Wis. topped the list with the highest credit score of 789, unseating Minneapolis, Minn. from the number one spot after a four-year reign. At the bottom of the spectrum were Harlingen, Texas, Jackson, Miss. and Corpus Christi, Texas. The complete list, along with credit education tips and information for consumers, is available at livecreditsmart.com.
“As our nation struggles to regain its footing amid this crushing economic recession, we want to do all that we can to educate American consumers about how to improve their financial standing,” said Maxine Sweet, Experian vice president of public education. “This nationwide credit assessment sheds light on the cities most affected by low credit scores and provides insight into the successes and challenges various regions have faced. We see this as an opportunity to help consumers better understand how credit works so they can make informed, responsible decisions — in other words, live credit smart.”
Compared with last year’s State of Credit assessment, many cities have improved, albeit by slim margins. Five out of 10 of the bottom markets have increased their credit scores and decreased debt since 2010. However, average debt nationwide has only decreased by about 1 percent — it is down about $200 to $24,542— indicating that those working to improve their debt-to-credit ratio are having difficulty making progress. A low debt-to-credit ratio is an important element of a high credit score.
While no one factor determines a consumer’s credit score, the fallout of a weakened economy continues to contribute to major setbacks such as foreclosures and unemployment. Naturally, these factors were drivers in the rankings and trends for different regions of the country.
“We’ve all heard the latest news — bankruptcy rates are up, mortgage delinquencies are rising and people are still losing their homes,” said Michele Raneri, Experian vice president of analytics. “Experian’s State of Credit data shows that we still have a long way to go toward economic prosperity but that many consumers are taking small steps toward improving their credit and debt management.”
A few areas stand out from the rest. Wisconsin residents remain among the nation’s most fiscally responsible, with four of the top 10 ranking cities positioned solidly in the upper 700 credit score ratings (based on the VantageScore® 501–990 scoring range). In contrast, many others are struggling with credit and the housing crisis, including Las Vegas, Nev. residents who ranked within the bottom 10 regional credit scores for the past three years.
Credit scoring translates the information in an individual’s credit report into a simple number that is one factor lenders use to evaluate the level of risk involved in extending credit. Not only does a credit score make a difference when it comes to gaining access to credit, it also affects the interest rate a consumer pays when borrowing, thus a good credit score yields financial benefits over the long term.
Below is a snapshot of the 10 cities with the highest average credit scores and the 10 cities with the lowest average credit scores in the U.S. (scores are rounded to the nearest whole number).
Cities with the highest credit scores:
1. Wausau, Wis.: 789
2. Minneapolis, Minn.: 787
3. Madison, Wis.: 785
4. Cedar Rapids, Iowa: 781
5. San Francisco, Calif.: 781
6. Green Bay, Wis.: 780
7. Boston, Mass.: 779
8. Peoria, Ill.: 778
9. Sioux Falls, S.D.: 778
10. La Crosse, Wis.: 777
Cities with the lowest credit scores:
1. Harlingen, Texas: 686
2. Jackson, Miss.: 701
3. Corpus Christi, Texas: 702
4. Monroe, La.: 706
5. Shreveport, La.: 706
6. Augusta, Ga.: 709
7. Bakersfield, Calif.: 709
8. Las Vegas, Nev.: 709
9. Tyler, Texas: 710
10. El Paso, Texas: 710
Experian’s call to action
In looking at these scores and trends, there are still myriad financial challenges consumers need assistance navigating. To deepen its more than 30-year commitment to consumer education, Experian will be implementing a series of educational programs late this year and in early 2012 that will provide resources and tools to help consumers improve their financial health.
In addition, Experian’s CreditReport.com™ is sponsoring the Secret Millionaires Club “Learn and Earn” promotion, a financial education program featuring Warren Buffett who teaches a group of kids smart financial habits they can start at a young age.
To see the complete list of cities and credit scores, and to learn more about building and maintaining a strong credit history, please visit livecreditsmart.com.
This analysis is based on a statistically relevant sampling of Experian’s consumer credit database. Analyzed credit files did not contain personal identification information. Credit scores for the State of Credit report were based on the average VantageScore by designated market area from January through June 2011.
Edelman for Experian
VantageScore, which is used by lenders and is now available to consumers, is the first credit score developed cooperatively by Experian and the other national credit reporting companies. With VantageScore, consumer scores fall within a range of 501 to 990 and the scale also approximates the familiar academic scale, making it simple to associate your VantageScore number with a letter grade. For more information, visit http://www.experian.com/consumer-products/vantage-score.html.
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was $4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.
Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.
VantageScore® is owned by VantageScore Solutions, LLC.