Study: South Claims the Lowest Average Credit Scores

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Mar 2nd, 2011 @ 10:04 PM by Amber Nelson
A recent report from credit monitoring company Experian found that the average credit scores have been going down in the South, but have remained strong in the Midwest and West.
Based on the VantageScores, the credit ratings created by the three major credit reporting bureaus, 22 of the 25 U.S. cities with the lowest scores during December 2010 were in the South. Texas itself had seven cities on that list including Harlingen, El Paso, Tyler, Waco, San Antonio, Dallas and Houston, in order from lowest to highest. The only non-southern areas to make the bottom 25 list were Las Vegas and two California cities, Fresno and Bakersfield.
Maxine Sweet, vice president for public education at Experian, explained why many Texas cities were on that list.

"Part of that is just a lot of younger people moving in, and a larger migrant population – so by younger, meaning not just in age, but also less depth in their credit history, and we think that's one factor," she said as quoted in the New York Times. "When you have these consumers who are in crisis with foreclosures and unemployment, that has to be driving up their credit card debt."

Interestingly, many Southern cities also carried the highest credit card debt. San Antonio topped the list with residents owing an average of $5,177 on credit cards. That figure is 21 percent the national average in December, which was $4,284. Then came Jacksonville, FL, Atlanta, Honolulu, and Dallas/Fort Worth.
On the other end of the spectrum, the city with the highest average VantageScores was Green Bay, Wis. It was followed by Madison, Wis. Other states posting cities on the top 25 highest credit scores list included California, Minnesota, Oregon and Iowa. There were no Southern states in the top 25.

"Cities like Minneapolis, that always have great credit scores, actually have higher debt than other cities," Ms. Sweet commented. "But it's offset by the fact that they never miss payments, and they always have high credit limits."

One good piece of news may be that the national average credit card debt amount fell in December by 4 percent from the previous year according to Experian. Then again, the Federal Reserve’s most recent data says that revolving credit rose 3.5 percent in December, for the first time in 27 months. Obviously, we are still getting mixed signals from our confused economy.
About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.
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