Costa Mesa, Calif., Nov. 30, 2016 — Credit scores are on the rise and improved credit behaviors indicate a strong credit market, according to Experian’s seventh annual State of Credit report. The nation’s average credit score* is up four points — 669 to 673 from last year — and is only six points away from the 2007 average of 679. This is a promising sign as the economy continues to rebound.
The study ranked American cities by credit score and revealed which cities are the best and the worst at managing their credit, and include is a glimpse at how the nation and each generation are faring. As an advocate for consumers and credit education, Experian® is offering 45,000 Experian Credit Educator(SM) sessions for free to select nonprofits that serve consumers in lower-ranked cities.
Findings from the report show nearly every Metropolitan Statistical Area (MSA) increased its scores. Mankato, Minn., earned the highest ranking with an average credit score of 708, and Greenwood, Miss., placed last with an average credit score of 622. However, Greenwood had the greatest improvement in its score (a 1.58 percent increase) of all cities.
“We are seeing the positive effects of economic recovery, with the rise in income and low unemployment reflected in how Americans are managing their credit,” said Michele Raneri, vice president of analytics and new business development at Experian. “All credit indicators suggest consumers are not as ‘credit stressed.’ Credit card balances and average debt** are up, while utilization rates remained consistent at 30 percent.”
|National Average||Silent Generation||Baby Boombers||Generation X||Generation Y||Generation Z|
|Number of credit cards||
|Average balance on credit cards||$5,551||
|Average number of retail cards||1.51||1.12||1.82||1.65||1.34||1.24|
|90-plus days past due delinquency****||32%||16%||27%||40%||40%||13%|
What a difference a year makes
Las Vegas, Nev., saw a significant improvement in its ranking. The city climbed out of the bottom 10 this year, ranking 193rd — 10 spots higher than its position in 2015. Las Vegans increased their score from 636 to 645 by decreasing delinquencies from 49 percent to 45 percent and keeping their revolving utilization steady at 34 percent. Las Vegans also increased average debt and balances in the mortgage, retail and credit card areas.
Jackson, Miss., also increased its ranking by seven spots, earning the 198th place this year. The city’s average credit score jumped from 635 to 642, moving it out of the bottom 10. Incidences of late payments decreased from 0.61 to 0.56 (9.19 percent) and delinquencies from 47 percent to 43 percent. Average debt also dropped from $41,290 to $40,309.
Although both cities increased their average score, Corpus Christi, Texas, and Bakersfield, Calif., joined the bottom 10 this year. Both cities increased their average score from 637 to 639.
Madison, Wis., took 10th place this year, knocking Cedar Rapids, Iowa, out of the top rankings. The city increased its average score from 699 to 702 and decreased late payments from 0.24 to 0.19 and delinquencies from 22 percent to 20 percent.
“When comparing the cities with the highest credit scores and those with the lowest, we definitely see similar trends,” continued Raneri. “Cities with higher credit scores have lower utilization rates, late payments and balances, while those with lower scores have just the opposite.”
Top 10 highest average credit scores by city
|2016 highest rankings||City||State||
2016 average VantageScore
|2015 average VantageScore|
Bottom 10 lowest average credit scores by city
|2016 Lowest rankings
2016 average VantageScore
|2015 average VantageScore|
For a more complete look at the above cities as well as the other MSAs studied, visit http://www.livecreditsmart.com to view a fully interactive map and infographic.
Making a positive impact
Experian is giving away 45,000 free Experian Credit Educator sessions over the next year to nonprofits that serve consumers in lower-ranked cities. Consumers will receive a personalized, one-on-one phone session with a trained Experian agent lasting approximately 35 minutes. During the session, consumers will receive a copy and detailed walk-through of their Experian credit report and VantageScore, as well as specific actions that may help improve their score. Participating organizations include Call For Action, Mission Asset Fund, Money Management International, and Society for Financial Education and Professional Development, Inc.
“Year after year, this study has shown that lower-ranked cities have struggled to improve their credit standing. We want that to change and start to see these cities improve significantly,” said Rod Griffin, Experian’s director of public education. “Consumers who have participated in an Experian Credit Educator session have increased their score by an average of 14 points in as short as six months; it’s a testament that a little education can go a long way.”
Additional data and educational resources
For more than 20 years, Experian has been committed to improving consumer financial literacy and is dedicated to providing products and services that help consumers to better manage their credit reports and credit scores. To chat with Experian live and learn more about credit:
• Join the #CreditChat, hosted by @Experian_US on Twitter, with financial experts and consumers every Wednesday at 3 p.m. Eastern time.
• Experian is sponsoring a Twitter chat with @Wisebread on Dec. 15 at 3 p.m. Eastern time to chat about the study and its findings. Register at http://www.wisebread.com and follow #wbchat.
• Schedule a personal Experian Credit Educator session today at http://www.experian.com/crediteducator.
In addition to helping consumers, Experian can help organizations make highly informed and data-rich decisions based on consumer credit trend behavior and can find, segment, score and grow key populations through Credit3D(TM). With this type of intelligence, Experian can provide clients with the tools to give their customers credit insight and help stress the importance of credit education — an essential and helpful benefit to the lender and the consumer.
The consumer analysis is based on a statistically relevant sampling of Experian’s consumer credit database and the Q2 Experian–Oliver Wyman Market Intelligence Reports. Analyzed credit files did not contain personal identification information.
*The VantageScore range is 300 to 850.
**Average debt for this study includes all nonmortgage debts.
***Average late payments represent the average number of late payments in a billing cycle. So in the June 2016 billing cycle, consumers had less than one late payment on average.
****90-plus days past due delinquencies encompass all trades, including third-party collections. Any trade that is 90 or more days past due — including collections, charge-off, repossession and foreclosure — are counted.
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