According to the credit – reporting company Experian, eight of the 10 cities whose residents have the highest average credit scores are in the Midwest. And of these 10 cities, four are in Wisconsin. In a report titled the State of Credit, Experian ranked 143 U.S. cities by residents’ average credit score.
Experian based the results on VantageScore, a credit – scoring system developed by TransUnion, Equifax and Experian, the three major credit – reporting companies. VantageScore aims to make credit reporting more uniform than relying on the rating systems deveoped by individual credit – reporting companies, explains Experian.
The average nationwide VantageScore in 2011 is 749, according to the report for which Experian tapped its own consumer database. Data for the study came from credit report data gathered between January and July 2011.
The State of Credit points out the obvious that the nation’s troubled economy is a major cause of poor credit scores. The report notes that missed or late payments on credit cards and mortgages lower credit scores. Therefore, the report includes the number of foreclosures in each city and its unemployment rate, figures that come, respectively, from RealtyTrac.com (June 2011) and the U. S. Bureau of Labor Statistics and its Unemployment Rates for Metropolitan Areas (June 2011).
Factors Affecting Credit Scores
Influencing credit scores negatively are whether consumers max out or almost max out their credit and whether they make late payments. Late payments are certain to bring a credit score down. If consumers pay on time for a long period, that helps the credit score. Lenders are particularly interested in how a consumer is paying now. If a consumer who once paid on time is missing payments now, the indication to lenders is that the consumer is having financial troubles.
The Top Ten
Here are the 10 cities in order of ranking. The population figures are from the U. S. Bureau of Census, 2010 report.
1. Wausau, Wisconsin. The city with the smallest population in the top ten, 39,106 people live in Wausau.The average credit score for its residents is 789 in 2011. Unemployment is 8.10 percent and the foreclosure rate is one in every 36 homes.
2. Minneapolis, Minnesota. In 2010, 382,578 people lived there. The average credit score is 787. Unemployment is at 6.90 percent and foreclosures are one in every 786.
3. Madison, Wisconsin. The city with the largest population of the ten, Madison has 5,686,986 residents. The average credit score is 785. Six percent is the unemployment rate and the number of foreclosures is one in every 110.
4. Cedar Rapids, Iowa. The average credit score for this city of 3,046,355 ls 781. The city has six percent unemployment and for every 51 homes, one is in foreclosure.
5. San Francisco, California. A city of 805,236, San Francisco’s average credit score is 781. Unemployment is at 10.0 percent and foreclosures are one in every 333.
6. Green Bay, Wisconsin. With a population of 104,057, this city’s unemployment is 7.90 percent and the number of foreclosures is one in every 97. The average credit score is 780.
7. Boston, Massachusetts. A city of 617,594, the unemplyment rate is 7.10 percent and for every 110 homes, one is in foreclosure. The average credit score is 779.
8. Peoria, Illinois. This city has a population of 115,007 and an unemployment rate of 7.90 percent. The number of foreclosures is one in every 48. The average credit score is 778.
9. Sioux Falls, South Dakota. Its population is 153,888. Its unemployment is 4.50 percent and its foreclosure rate is one in every 50. The average credit score is 778.
10. La Crosse, Wisconsin. Its population is 51,320. Its unemployment rate is 6.70 percent and the number of foreclosures is one in every 35.The average credit score is 777.