Credit Scores in Our Current Economic Times 2017-10-23T10:54:22+00:00

Credit Scores in Our Current Economic Times

Better Credit…Better Options

 

With the economic situation over the last five years, consumers all around the country have experienced issues with credit scores.  There is a common misconception that consumers who earn a high annual income are immune to such credit problems; however, that is not the case.  Life can be unpredictable for anyone, and many people have found themselves facing the burden of less than perfect credit.  There are some cities, states, and regions that were disproportionately impacted by the dire economic situation that was fueled by the mortgage crisis.  Southern states account for all ten of the worst cities in the nation for average credit scores. Conversely, the mid-west accounts for eight of the top ten cities for best credit scores.

According to Experian, during the first six months of 2010 the average credit score in the United States was 748 – based on the Vantage scoring model.  The average national Vantage credit score crept to 749 in 2011 and 750 in 2012.   Keep in mind that the Vantage scoring model is very different from the FICO scoring model.  The Vantage scoring model ranges from 501-990; whereas the FICO scoring model typically ranges from 300-850. Therefore, the average score on Vantage would be much higher than the average FICO credit score.   The Vantage scoring model was launched in 2006 by the three major Credit Reporting Companies (CRC’s): Experian, Equifax, and Transunion.  They developed the Vantage scoring model because they believe it to be more highly predictive in determining the risk level of potential borrowers.

Harlingen, Texas has historically demonstrated very poor credit scores.  In 2010, Harlingen residents had the lowest average credit scores in the country according to Experian. The average credit score was 684 on the Vantage scoring model which is significantly below the national average.  In 2012, Harlingen, TX was once again named the city with the worst credit in the country, although the average Vantage score improved to 688.  Harlingen, TX was the only city in the country with average credit scores of below 700 on the Vantage scoring model.  It is not, however, the only city in Texas that consistently ranks at the top of the list of cities with the worst average credit scores in the country.  Corpus Christi, El Paso, and Tyler, Texas consistently rank as cities with some of the worst credit scores as well.

Corpus Christi was ranked as the third worst city in the country for average credit scores with a 706 average Vantage credit score. This is a slight improvement from 2010 when they were also ranked the third worst city in the country with an average Vantage credit score of 700. Historically, the city of El Paso has also struggled with credit scores, and along with the city of Harlingen, has unemployment rates that are higher than the national average.  El Paso credit scores have risen from an average Vantage score of 706 to 710 from 2010 to present.  However, the city still retains the dubious distinction of being ranked the seventh worst city in the country for average credit scores.

Rod Griffin, who is Experian’s director of public education (and a Texas resident himself), says there is nothing wrong with Texas, it is just that these cities are currently dealing with struggling economies. The statistics seem to prove what Mr. Griffin is saying, for in spite of the fact that there are three Texas cities on the worst average credit score list(by city), Texas did not make the list for the top ten states with the worst credit scores. However, there are a lot of other cities in Texas that have credit scores below the national average.  Waco just missed the list with a very low average credit score of 713. San Antonio and Beaumont have an identical average low credit score ranking of 716. Dallas and Wichita Falls rank a little better, but both are still very low on the list of average credit scores with an average score of 722.  Houston and Amarillo fare slightly better with average low credit scores of 724. Austin, which has a better average credit score than the aforementioned cities (742), still ranks below the national average.

Another southern state that is not on the top ten list of worst credit conditions, but is ranked as one of the worst in terms of credit scores, is Louisiana.  Louisiana actually ranks as the state with the second lowest average credit score (635) based on the FICO model.  It is no surprise as many residents of Louisiana had their credit scores negatively impacted after Hurricane Katrina.  Louisiana’s credit card delinquency rate is very high and is actually the fourth highest in the country according to Transunion. One of the cities that has consistently been on the list of the worst credit scores in the country is Shreveport, Louisiana. Shreveport residents had an average Vantage credit score of 701 in 2010.  This increased to an average of 708 in 2012, but this still leaves them ranked as the fourth worst credit in the country during both years. Shreveport is the third largest city in Louisiana with over 218,000 people according to the 2010 census.  The city is located right near the borders of where Louisiana, Texas, and Arkansas meet.  Shreveport is a part of the Shreveport-Bossier City Metropolitan areas which have a combined population of over 400,000 people. They reside in the Caddo and Bossier Parishes. Louisiana does have one of the highest sales tax rates in the nation.   Because the city and its residents get a lot of their revenue from travel and gambling, the recent economic downturn has certainly hit the area hard.  Monroe, Louisiana is another city that has consistently been on the list of worst average credit scores by city and is currently ranked fifth worst with an average Vantage credit score of 709.  This is a slight increase as they were ranked sixth worst in 2010 with an average credit score of 706. Baton Rouge, Louisiana also ranks very low with an average Vantage credit score of 729 according to Experian.  Lafayette is another city in Louisiana that has low average credit scores (730) despite having very good debt- to-limit ratios among its residents.  New Orleans which is Louisiana’s most populated city actually has the best credit out of the ones listed in Experian’s report.  However, New Orleans average credit score is 73,1 which is significantly lower than the national average. And although Metairie and Lake Charles were not included on the list, they have also had some financial difficulties which have caused people to have lower credit scores.

Jackson, Mississippi is another city that has been historically known to have bad credit as they were ranked second for worst credit averages. The average Vantage credit score was under 700 with an average of 698.  In 2012, residents of Jackson have slightly increased their average credit score to 702, which would still make them the city with the second worst average credit score in the country.  The city of Jackson is the capital of Mississippi and interestingly enough, despite being one of the worst credit score cities in the country, Jackson is ranked as third out of the America’s top 100 metro areas for the best “Bang For Your Buck” city according to Forbes Magazine.  This study included many criteria including housing rates and overall affordability.  Overall, the state of Mississippi ranks as one of the worst states for credit. Mississippi has the highest rate of credit card delinquencies and they are second worst in the country based on average credit scores.  Mississippi had previously been named the worst state based on average credit scores in the country. Columbus, Mississippi also ranks towards the bottom of the list with very low average credit scores of 717.

Memphis, Tennessee has recently joined the list of the cities with the worst average credit in the country.  Memphis residents are ranked the ninth worst city in the nation based on their average Vantage credit scores. Memphis is the largest city in Tennessee with a population of over 646,000 according to the 2010 census.  Tennessee as is also on the top ten list of worst credit scores in the country (by state).  The biggest problem in Tennessee is they have the third highest bankruptcy rate in the country. In terms of credit scores, Chattanooga, Tennessee was the second worst city in Tennessee with an average credit score of 730. Nashville, Tennessee ranks below average on credit scores as well with an average Vantage score of 740. The Tri-cities area ranks even lower with an average credit score of 738. Knoxville, Tennessee has the highest average credit score; yet it is still below the national average for credit scores at 743.

Bakersfield, California and Las Vegas, Nevada have managed to get themselves off the top ten lists for the worst credit scores in the nation. Bakersfield residents had an average Vantage credit score of 708 in 2010 making them the eight worst city in the nation in terms of credit scores.  Las Vegas, Nevada was the seventh worst in 2010 with an average credit score of 707 on the Vantage scoring model.    Las Vegas was on the list for worst average credit in 2011, but managed to just miss the list in 2012. Las Vegas is actually very high on the list of the average number of open credit cards per person as well.   It came as a surprise when Las Vegas made it off the list of the top 10 worst cities; especially when you consider that Nevada is the worst state in the country for credit scores. In fact, Nevada not only ranked the worst for average credit scores, but also for bankruptcy and unemployment.

Las Vegas and many other cities in Nevada were dramatically impacted by the mortgage crisis of recent years. Fortunately, the foreclosure rate in Las Vegas has decreased by over 162% from 2011 to 2012.  Las Vegas has also slightly improved its standing in terms of average debt, balance to limit ratio, and unemployment rate. The average credit score increased to 714. Reno, Nevada residents had an average credit score of 740 in 2011 on the Vantage scoring model; this is still below the National average.  Henderson, Paradise, North Las Vegas, Sunrise Manor, Spring Valley, Enterprise, Sparks, and Carson City are the other larger cities in Nevada that were not ranked, but many have suffered from the financial setbacks that have inundated Nevada.

California is another state that has consistently ranked at the bottom when it comes to credit scores and credit conditions.  However, as of February 2012 the S&P 500 did upgrade California’s financial outlook from stable to positive.  This was after California fell to worst in the nation on the S&P 500 scale in 2009 due a budget deficit that reached into the billions. In January of 2010, the S&P 500 cut their rating even further from an A to A-. In 2011, California was ranked as one of the worst states for credit conditions (according to cardratings.com).  In addition, it had the second highest unemployment rate, the third highest foreclosure rate, and the fourth highest bankruptcy rate. And as of 2012, California has the highest foreclosure rate of any state in the nation.  This comes as no surprise as California was hit very hard by the mortgage crisis and the economic collapse. As previously stated, Bakersfield is the city with the worst credit scores in the state. According to data from Experian’s 2011 rankings, the second worst city based on credit scores is Fresno, California.  Los Angeles is next on the list with an average Vantage score of 738.  Los Angeles also has a very high average of 1.91 for the amount of open credit cards per resident and ranks low on the percent of credit available. Palm Springs, California is also on the list for below average credit scores with an average score of 741. Sacramento, California, which has gone through some economic troubles as well, is also below the national average with a 745 credit score.

Conversely, San Diego, California actually ranks as the 61st best city for credit in the country with a slightly above the national average Vantage score of 753. San Diego still does have many people with credit issues, but overall they have remained a pretty stable city. Chico, California actually ranked slightly higher with an average credit score of 754. Monterey, California is also above the national average at an average credit score of 759.  Santa Barbara, California ranks high on the amount of open credit cards, yet has still managed to have one of the highest average credit scores for any city at 771. The highest ranked city in California in terms of credit scores is San Francisco.  San Francisco is actually ranked as the fifth highest average credit score of any city in the U.S. with an average of 781.  One thing that is quite common to the people who live in these cities is that they have the highest average of open credit cards, and they have the lowest average balances as a percentage of their available credit.

Balance to limit ratio is a very important factor in credit scores and in credit risk models. Balance to limit ratio is not the same as debt to income ratio as income is not factored into credit scoring.  Balance to limit ratio refers to the ratio of the amount of debt you have on a revolving account in comparison to the credit limit you have on that account.  The credit scoring models will calculate a balance to limit ratio on each individual revolving account and also as a total of all of your revolving accounts.

It is no surprise that Florida is also on the list of states with a lot of financial and credit issues.  Florida was hit hard by the mortgage crisis and now ranks very high in foreclosures, credit card delinquencies, and unemployment.  Bankruptcy rates are high and credit scores are low. Tallahassee, Florida is the city with the worst credit in the state with an average credit score of 719 which is well below the national average.  Tallahassee residents also have one of the highest balance to limit ratios on their credit reports. Miami, Florida fares no better than Tallahassee; the average Vantage credit score is also 719.  Miami also ranks at the top of the list of the worst balance to limit ratios on their credit reports. Jacksonville is another Florida city that ranks at the bottom of the list based on credit scores with an average credit score of 727. They have one of the worst balance to limit ratios as well.  Orlando, Florida is also rated towards the bottom with a low credit score of 734, but they do rank better on debt to limit ratios.  Tampa, Florida has a higher average credit score of 740, but that still falls below the national average of Vantage scores. Ft. Myers, Florida is ranked above the national average for credit scores at a 750 average. This is probably a direct result of their low balance to limit ratios. West Palm Beach, Florida ranks the highest of any city in Florida with an average credit score of 753. St. Petersburg, Hialeah, Port Saint Lucie, Cape Coral, Pembroke Pines, Hollywood, Coral Springs, Gainesville, Miramar, Clearwater, Pompano Beach, and Palm Bay are all Florida cities with greater populations than West Palm Beach, but were not included on the list.  Many of these cities have experienced credit issues due to the mortgage crisis and the overall financial difficulties of the state.

Arizona was another victim of the mortgage crisis, so it is no surprise that they also have the second worst foreclosure rate in the country.  Arizona ranks as one of the worst states for credit scores, credit card delinquencies, and bankruptcies. Phoenix, Arizona is the worst city in the state in terms of credit scores with an average of 733.  Tucson, Arizona actually ranks around the national average with an average credit score of 748. Experian provided credit score information on 143 cities, but there were many heavily populated cities in Arizona that were not listed. Mesa, Chandler, Glendale, Scottsdale, Gilbert, Tempe, Peoria, and Surprise round out the ten largest cities in Arizona, but none were included on the list. Considering where Arizona ranks as a state and the financial difficulties the state has sustained, you would have to imagine none of those cities would have very high average credit scores.

Alabama is another state that ranks very poorly in a lot of financial categories. Alabama ranks in the bottom ten of states for credit scores, bankruptcies, and credit card delinquencies. However, the state does have a lower foreclosure rates than most states.  Montgomery, Alabama ranks as the worst city in the state as far as average credit scores with a very low average of 712.  Birmingham, which is the most populous city in Alabama, has the second lowest average credit score in the state with an average Vantage score of 731. Huntsville, Alabama is another city with a lower average credit score (743) than the national average.  Mobile, Tuscaloosa, Hoover, Dothan, Decatur, and Auburn are among other cities in Alabama that were not on the list, but they do fall into the category of below average credit conditions.

Michigan is another state that has been devastated by the weakened economy and the mortgage crisis.  One of the biggest impacts to Michigan’s economy was the crash of the U.S. auto industry and the subsequent loss of many manufacturing jobs.  Although the auto industry has rebounded, Michigan’s economy has not rebounded nearly as much.  The S&P 500 still has Michigan ranked towards the bottom in terms of its credit rating. Michigan does actually have a lower credit card delinquency rate than most states, but it is among the ten worst states for bankruptcy rates, unemployment rates, and foreclosures.  These factors have also impacted the overall credit scores of many Michigan residents. Detroit, which is the largest city in Michigan, has a below average credit score of 743 among its residents.  Flint, Michigan is ranked slightly higher based on credit scores, but is still below the national average according to its Vantage score 747.  Lansing, which is the Capital of Michigan, is slightly above the national credit score average with a 750 credit score, but is still not at a level that is desirable for lending purposes. Grand Rapids, which is the second most populated city in Michigan, is also slightly above the national average for credit scores with a 753.  Traverse City ranks as the highest city in Michigan on Experian’s list in terms of credit scores with a 756. This is probably the result of very good debt to limit ratios on their revolving accounts.  There were quite a few Michigan cities on Experian’s list, but some of the most populous cities of Warren, Sterling Heights, Ann Arbor, Dearborn, Livonia, Westland, and Troy were not included.  Michigan has a long way to go to build up their credit scores and get back on track financially, but it seems they are going in the right direction.

Illinois actually ranks about average when it comes to credit card delinquencies and credit scores, but it does rank in the bottom ten in foreclosures, bankruptcies, and unemployment. This has definitely had an impact on the economy in Illinois.  Every city in Illinois that was on Experian’s list of credit score rankings was above the national average.  Champaign, Illinois has solid numbers across the board in relation to average debt, debt to limit ratios, average number of late payments, and average number of open credit cards. The average Vantage credit score is 754.  For a major city, Chicago actually has very good numbers in most financial areas:  Chicago residents have an above average credit score of 760.  Rockford, Illinois boasts pretty good numbers as well and has an average credit score of 761. Peoria, Illinois actually ranks in the top ten of all the cities on Experian’s list with an average Vantage score of 778. This score is good enough to claim the spot for eighth highest in the country. Interesting enough, Peoria does have the highest average debt amounts of any city in the top ten, yet they still have one of the best debt to limit ratios in the country.

Indiana is has a higher foreclosure rate, credit card delinquency rate, and unemployment rate than average.  Indiana also has lower than average credit scores and a very high percentage of bankruptcies per resident as well.  The good news is the credit scoring models do allow you to have good credit again after discharging a bankruptcy. However, you do need to make sure you don’t have any new derogatory items show up on your credit report after a bankruptcy.  Indianapolis, which is the capital and largest city in Indiana, ranks below average in terms of average credit score with a 741 vantage score according to Experian.  Fort Wayne, which is the second largest city in Indiana, is slightly below the national average for credit scores with an average credit score of 747. South Bend, Indiana is slightly above average with a credit score of 753, and they have one of the lowest averages of debt in the country.  Evansville has the highest average credit scores of any city in Indiana on Experian’s list with an average Vantage credit score of 755.  One thing that seems pretty consistent about the Indiana cities listed is that the average debt amount of their residents is much lower than a lot of the other states.  of other states Hammond, Bloomington, Gary, Carmel, Fishers, Lafayette, and Muncie, Indiana are some of the other mid-sized cities in Indiana that figure to be around the same; they most likely exhibit lower debt amounts and about average credit scores.

Surprisingly, Idaho is on the list for overall worst credit conditions (by state) despite having an average credit score that is better than most other states.  Idaho does, however, rank below average in bankruptcies, unemployment, and credit card delinquencies. The state has the seventh worst foreclosure rate in the country.  Boise is the only city in Idaho that was listed by Experian. This is to be expected as it is the capital and the only large city in the state.  Boise has an above average Vantage credit score of 754.  Boise residents also have one of the greatest number of revolving credit cards per resident in the country (1.9) of people with an Experian credit report.

It is ideal to have at least two revolving credit accounts on your credit report to maximize your credit scores.  You also want to keep the debt on the credit card as low as possible while making sure you utilize the credit card on a consistent basis.  It is important to use the credit card on a consistent basis, because many credit card companies do not update the information to the credit reporting agencies on any cards that have a zero balance and are inactive even though they are still open.

North Dakota residents have a lot to brag about financially.  North Dakota has an unemployment rate of only three percent, very high average credit scores, and foreclosures that are few and far between.  They also rank towards the top in lowest amount of credit card delinquencies and bankruptcies.  Fargo, which is the largest city by population in North Dakota, also has the highest average credit score.  Fargo’s population of 105,000+ boasts an impressive average Vantage credit score of 776 according to Experian. This would place Fargo in the top fifteen cities in the country for credit scores. Fargo residents also have one of the highest averages of open credit card accounts (1.99 per resident) of people with a credit report on file at Experian. They can also boast one of the lowest balance to limit ratios as well.  Bismarck, which is the Capital of North Dakota, did not make Experian’s list, but probably has very similar credit score numbers as well.

Vermont is another state that maintains very good credit and financial numbers among its residents.  Vermont has the second lowest bankruptcy and foreclosure rates in the nation. Vermont is also in the top ten for the highest average credit scores, least amount of credit card delinquencies, and low unemployment rates.  Vermont is, however, the second least populous state in the country; so even though the numbers are based on averages per resident, it does make it easier if the economy is good and the population is small.  Burlington is the most populous city in Vermont with a population of around forty thousand people. Its residents can be proud of their very high average credit score of 772.  Having a Vantage credit score that high is good enough to be in the top 20 of the cities on Experian’s list of top cities by credit score.

South Dakota is another state whose residents seem to be very strong in many different financial aspects.   South Dakota ranks in the top ten for low bankruptcy rates, credit card delinquency rates, foreclosures, and unemployment rates. It is in the top 3 for credit scores.  Sioux Falls, the largest city in South Dakota, also ranks as one of the top ten cities with the highest credit scores in the country.  The average credit score for Sioux Falls residents is 778 on the Vantage scoring model. Sioux Falls has a high average amount of credit cards and very good debt to limit ratios. Rapid City is the only other city in South Dakota with at least a mid-sized population. Although the city was not on Experian’s list, it’s probably safe to assume many residents of Rapid City have very good credit as well.

Montana ranks in the top ten for bankruptcy rate, credit card delinquency rate, foreclosures, and credit scores. Montana is not in the top ten for unemployment though, with a 6.4 percent rate; but this is still below the national average by state.  For some reason, Experian did not include any cities in Montana on their list of cities with the highest credit scores.  However, this does not mean certain cities   wouldn’t be on the list.  Billings, Montana is the most populous city in the state and there are some small to mid-size cities like Missoula and Great Falls.  Based on the all the other data we know about the residents of Montana, it is safe to surmise that the credit scores of the residents of these cities probably rank pretty high on the national average for credit scores.

Iowa is not only ranked as one of the safest places in the country to live, but the state also ranks very well financially.  Iowa has a very low credit card delinquency rate, low unemployment, and a high average credit score.  Cedar Rapids, which is the second largest city in Iowa, not only has great credit, but according to Experian’s report they have the fourth highest average credit score in the nation of the 143 cities on the list. Experian reports that Cedar Rapids residents have an average Vantage credit score of 781.  One reason for that appears to be that they have a very low balance to limit ratio. The average person is carrying a balance on only 24% of their available revolving credit lines.  Des Moines, which is the capital and largest city in Iowa, is also in the top twenty in average credit scores with a score of 773.  Des Moines is much like Cedar Rapids in that its residents maintain very good balance to limit ratios.  Davenport is the third largest city in Iowa and also has the third highest average credit score of those Iowa cities on the list with an average Vantage score of 769.  Once again it seems Iowans are smart about limiting the balances on their revolving accounts as Davenport ranks very high on its balance to limit ratio.

Balance to limit ratio is a very important factor in both credit scoring and when lenders make decisions about lending money. Ideally, you want to be below 10% on your balance to limit ratio, however staying under 40% is a very good rule to live by.  The higher your debt to limit ratio, the more your credit score may be negatively impacted.  Credit scores are based on a risk model so the more debt you have, the riskier you are to potential lenders.  Whether it is the Vantage scoring model or the FICO scoring model developed by Fair Issac, the purpose of the credit scoring algorithms is for companies to have a mathematical number, based on the financial information on a credit report, to determine individual risk.  In many cases, it is a lender who is using that credit score to determine whether you fit within a certain financial criteria. If you fit, the lender will lend you money; if you don’t fit, they will not lend you the money.  This means the more debt you carry on your revolving accounts as evidenced by your credit report, the more likely you are to be in financial difficulty now or in the future. Therefore, if your credit report reflects a higher level of debt than is desirable, other factors on your credit report may impact your credit score as well – such as having too many inquiries.

There are different types of inquiries that will show up on your credit report. A soft inquiry, also known as a “soft pull,” is an inquiry into your credit history that will not impact your credit score.  A soft inquiry may be conducted without your knowledge.  A credit card company may conduct a “soft pull” even before you receive a solicitation from them. Some mortgage lenders may do a soft inquiry in the pre-approval process for a home loan; or an employer may routinely pull your credit to assess your suitability for employment.  If you pull your own consumer credit report, that would also constitute a soft inquiry.

A hard inquiry or “hard pull” is a request for your credit information by a lender when you have applied for some sort of credit.  When you apply for a credit card, mortgage, car loan, refinancing loan, or any other type of loan, it is typically regarded as a hard inquiry and may impact your score.  How much an inquiry impacts your credit score is dependent on many factors.   The impact is based on a risk model which considers other information on your credit report before assigning a value that negatively affects your existing credit score. One reason for this is the credit bureau will not know the lender’s decision on financing until the item shows up on your credit report. In addition, if you have multiple inquiries in a short period of time, the risk model may suggest that you could be in financial trouble and that is why you are applying for credit.

This is why it matters what the rest of your credit report looks like.  If you already have debt, have made late payments in the past, or have had items go into a collection status – you would be considered higher risk.  However, if you have credit cards open with little to no balance and have a good credit history, those inquiries are likely to impact you much less.  It is a good idea to be aware of your credit score by pulling a consumer report and monitoring your credit on a consistent basis.  Then, before you apply for any type of financing, find out the financing company’s lending guidelines.  If you are more aware of your credit situation, you will be more likely to apply only for necessary items for which you qualify.

It is also a good idea to avoid opening up credit cards based on rewards and discounts being offered. This is a common tactic used by many retail stores. Everyone likes a discount, but many of these creditors will try to entice you with discounts on purchases to get you to apply for credit.  What most people don’t realize is that the small amount of money you save on those transactions may possibly be outweighed by the amount it may cost you if it negatively impacts your credit.  A small change in your credit score could impact whether you qualify for a mortgage or car loan; and if you do qualify, it could significantly impact your interest rate which means you will pay a lot more in interest than you probably saved on the reward for opening up those cards.

Many companies have become very good marketers and try to make you believe you need a particular product or that the price or availability of a product is only available for a limited time. This is rarely the case.  It is always a good idea to take your time when making any financial decision and if you feel pressured, then to proceed is probably not a good idea.  Also, if you can’t afford the item without opening up a credit card to pay for it, then it may be best to save up the money to buy the item outright.

Nebraska is another state is the mid-west that has maintained its financial well-being despite tough economic times throughout the country.  Nebraska maintains the second lowest unemployment rate in the country at 4%.  Nebraska also has very low credit card delinquency rates and very high credit scores.  Lincoln is the capital and second most populated city in Nebraska and also holds the honor as the city with the highest credit scores out of those on Experian’s “What is your state of credit?” list with a score of 774.  Omaha is the largest city in terms of population and also has a very good average Vantage credit score at 769.

Massachusetts is below average across the board in many of the financial categories. It is thirty-third for highest bankruptcy rates,nineteenth worst for foreclosure rates, sixteenth for highest unemployment rates, and the credit card delinquency rate is much higher than the national average.  Strangely enough Boston, which is the state’s capital and by far the most populous city, actually ranks consistently in the top ten best credit score cities in the country according to Experian.  Boston has an average Vantage credit score of 778 and is tied for the highest amount of open credit cards per person with San Francisco. Springfield, Massachusetts ranks above average in credit scores as well with an average of 761. Worcester, Lowell, Cambridge, New Bedford, Brockton, Quincy, Lynn, Fall River, Newton, Lawrence, and Somerville are other mid-sized cites who were not ranked on Experian’s list, but are probably closer to Springfield than Boston in average credit scores.  Massachusetts has maintained fairly average to above average credit despite being below average in many financial categories.

New York ranks in the top ten for the lowest average bankruptcy rate, and the state is barely below average in credit card delinquencies.  The foreclosure rate in New York is about average, but the unemployment rate is very high at 8.7% which makes it one of the top ten highest rates of any state in the union.  New York does rank above average in credit scores with Rochester, NY being the highest with an average credit score of 766.  Rochester does have a very high average of open credit card accounts, but also a higher average of total debt.  Albany is tied for the best credit with an identical credit score of 766 based on the Vantage scoring model.

Next on the list is New York City which includes the five boroughs of The Bronx, Brooklyn, Manhattan, Queens, and Staten Island. The city has an above average credit score of 762 which is pretty remarkable considering it is the largest city in the United States with over 8 million people. New York City also takes top honors for having the highest average of open revolving credit card accounts in the country. Buffalo, New York is an upstate city that has above average credit scores with an average score of 759. Syracuse, New York also ranks a little above the national credit score average of 756.It is the only city in New York listed as having an average of fewer than two credit cards per resident(of those who have an Experian credit report on file). Hempstead, Brookhaven, Islip, Oyster Bay, North Hempstead, Babylon, Huntington, Yonkers, Smithtown, Amherst, Ramapo, Greece, and Greenburgh were not on Experian’s list of average credit scores. It’s probable, based on the credit data, that these cities in New York have average to slightly above average credit just as do the cities already mentioned.
One thing that seems to be consistent with the cities in New York is that they all have higher amounts of open credit cards than the national average. This is not necessarily a bad thing as you definitely need to have multiple major revolving credit card accounts to maximize your credit score. It is most important to keep the balances low and not to continue opening new cards as that will lower the average age of your revolving accounts. You also don’t want to close your credit cards as it is very important to build history. The longer you have your credit cards open – the more history you build. This is an important part of credit scores.

Pennsylvania has done quite well financially despite not ranking very well in unemployment rate.  The credit card delinquency rate in Pennsylvania is about average as are foreclosure filings with one foreclosure out of every 1,368 households.   Pennsylvania also ranks very low in bankruptcy filings per capita with a rate of 2.35 bankruptcy filings per 1000. There have been a total of 22,240 bankruptcy fillings so far in 2012.  Chapter 7 bankruptcy account for 69% of the filings and Chapter 13 bankruptcy accounts for the other 31%.

Philadelphia is the largest city in Pennsylvania with a population of over 1.5 million people; however Philadelphia residents do not have the highest credit scores in Pennsylvania.  The average credit score in Philadelphia is 760 which is above the national average.  There have been almost 1000 foreclosures in Philadelphia this year. That number could have something to with the high unemployment rate in this historic city. Harrisburg, which is the capital on Pennsylvania, does not have a large population, but the average credit score in Harrisburg is the highest of any of the five cities in Pennsylvania that were featured on Experian’s list (an average Vantage score of 773).  It is interesting that Harrisburg has the highest credit scores as they actually have a very high foreclosure rate and a high average debt amount; however their unemployment rate is lower than the state average.

Pittsburgh is the second most populated city in Pennsylvania and is tied for the second highest average credit scores.  Pittsburgh has a much better foreclosure rate and an unemployment rate of 7.3% which is lower than the state average.  Pittsburgh does have a high amount of open credit cards and a higher than average debt; this seems to be pretty consistent across the state.  Pittsburgh overall has an average credit score that is much higher than the national average which also seems to be quite consistent across the state.  Scranton, PA does seem to be one of the cities in Pennsylvania that is having a little more financial trouble – they rank as the lowest average credit scores at a 758.  The foreclosure rate is actually phenomenally good in Scranton which is a bit surprising since the unemployment rate is a very high 9.5%.  Altoona, Pennsylvania has the lowest unemployment rate of these five cities, a low average debt amount, and a very low foreclosure rate.  Altoona residents also are tied for second in average Vantage credit scores with a 770 average.  Allentown, Erie, Reading, Upper Darby, Bethlehem, Bensalem, Lower Merion, and Lancaster are other mid-sized cities in Pennsylvania that probably rank above average in credit scores based on the financial data from the other major cities and the state as a whole.

The state of Ohio has gone through some significant financial struggles during the past few years because of the economic collapse and the mortgage crisis.  Ohio actually has a below average unemployment rate and a slightly above average credit card delinquency rate. The area where Ohio really struggles is they have very high bankruptcy and foreclosure rates which have also caused their credit scores to suffer.  Columbus is the capital city of Ohio and also the most populated city in the state.  Columbus is the closest major city to the southeastern region of Ohio which seems to be an area that is much more financially stable with a lower foreclosure rate and unemployment rate than the rest of the state.  The average credit score in Columbus however is not very good (752). This is just slightly higher than the national average and definitely not a desirable credit score for lending purposes.

Cincinnati, which is the third largest city in Ohio, has a slightly higher unemployment rate than the state average. The foreclosure rate is very high with over 800 foreclosures in 2012 out of a population of around 300,000 people.  Cincinnati does have the highest average credit scores in Ohio out of the six cities on Experian’s list with an average of 764.  Dayton, Ohio actually has the lowest average debt amount in the state and also the lowest amount of open credit cards; however Dayton residents also are tied for the worst credit scores in Ohio.  The average credit score in Dayton is 751 according to Experian; this is one point above the national average.

Cleveland, which is the second largest city in Ohio, has suffered from some significant financial troubles. They currently have a very high unemployment rate of 9% and an extremely high foreclosure rate with over 300 more foreclosures occurring in Cleveland than Columbus (with only half of the population).  Cleveland has an average credit score of 759 based on the Vantage mode. This is higher than a lot of other cities in Ohio despite the economic troubles they are facing.  Youngstown, Ohio is the smallest city on the list, but they do not have good numbers either with a much higher foreclosure rate than the national average and an average credit score of 751 which is only one point higher than the national average.  The final city on the list is Toledo, Ohio which is the fourth largest city in Ohio.  Toledo also has a high foreclosure rate and not very good credit scores with an average score of 751.  Toledo also has a high unemployment rate and a high average debt amount.   Ohio is below average overall in most financial and credit categories, but along with many states is starting to show some improvement.

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