In presenting findings for its second annual State of Credit study, the credit – reporting company Experian released a list of the top ten cities with the lowest average consumer credit scores. With an average credit score of 686, Harlingen, Texas was number one on that list. This compares to 787 for Wausau, Wisconsin, the city that was number one on the company’s list of cities with the highest average credit score.The national average credit score in 2011 is 749, Experian reports.
The average national 2011 debt is $24,542. For Harlingen that figure is $25,074. For Wausau the average debt is $22,439. So, there is some correlation between the amount of debt consumers carry and credit scores. As an article in the Brownsville (Texas) Herald points out, though Jackson, Mississippi has an average credit score of 701, it landed number two on the list of cities with the lowest credit score because overall its residents have a low median household income ($33,505) and heavy debt ($25,588).
Not suprisingly, unemployment rates affect credit scores too. The national unemployment rate at the time of the study was 9.2 percent and the report notes that nine of the top ten cities with the highest average credit scores had unemployment rates below the national average. Just look at the unemployment rates compiled by the Bureau of Labor Statistics for June 2011, which the State of Credit report used. Unemployment rates for the ten cities with the lowest average credit scores ranged from 7.2 percent for the Shreveport – Bossier City, Louisiana area to 12.9 percent for the Harlingen – Brownsville, Texas area. And those rates for the cities with the highest average consumer credit scores ranged from 4.50 percent for Sioux Falls, South Dakota to 10 percent for San Francisco.
VantageScore and FICO Score
For the State of Credit report, Experian used VantageScore, a credit – scoring product that Experian, TransUnion and Equifax-the three major credit – reporting companies-introduced in 2006. Experian touts VantageScore as more consistent than reports compiled when each company develops its own score.The VantageScore includes data not normally included in the traditional credit reports of the major reporting bureaus. For example, VantageScore can include on – time utility payments and rental payments if consumers ask companies to report those payments to credit bureaus.This is helpful for those who do not own a car or a house because they can still establish a track record for potential lenders to see.
The older FICO score for reporting credit worthiness is still used. the basis for computing it is mainly payment history, amount owed, length of credit history, new credit and types of credit used (credit cards, retail accounts, installment loans and mortgages).
Experian used figures from its own consumer database for the study that used VantageScore data compiled from between January and July 2011. VantageScores range from 501 to 990. Experian reports that the average national VantageScore in 2011 is 749. According to Experian, VantageScores from 501 to 600 are High Risk, 601 to 700 are Non – Prime, 701 to 800 are Prime, 801 to 900 are Prime Plus and 901 to 990 are Super Prime.
The Rankings
Here are the cities with the lowest average credit scores:
1. Harlingen, Texas. A city of 64,849 in 2010, according to the U.S. Census Bureau, the average credit score is 686.
2. Jackson, Mississippi. This city of 173,514 has an average credit score of 701 and average debt $25,588.
3. Corpus Christi, Texas. A population of 305,215 has an average credit score of 702 and the average debt of $24,289.
4. Monroe, Louisiana. A population of 48,815 has an average credit score of 706 and an average debt of $23,760.
5. Shreveport, Louisiana. A population of 199,311 has an average credit score of 706. The average debt is $23,607.
6. Augusta, Georgia. A population of 198,844 has an average score of 709 and average debt of $26,204.
7. Bakersfield, California. The city’s population of 347,483 has an average credit score of 709. The average debt is $25,697.
8. Las Vegas, Nevada. A city of 583,756 has an average debt of $24,975 and an average credit score of 709.
9. Tyler, Texas. This city of 96,900 has an average credit score of 710 and average debt of $26,408.
10. El Paso, Texas. A city of 649,121 with an average credit score of 710 and average debt of $23,639.