The American cities whose citizens lay claim to the highest credit scores - and the lowest - have been revealed. Following a pandemic-affected year during which borrowers increasingly paid down debt (opens in new tab) to the general benefit of their credit scores, it is the residents of The Villages, Florida, who can boast the highest median credit score of 807. As a result, they’re better placed than anyone else in the US to access the best personal loans (opens in new tab), mortgages and credit cards around right now.
Credit scores overall have widely improved during the health crisis due to consumers cutting back on their spending, putting their stimulus checks (opens in new tab) to good use either to keep on top of debt or pay back what they already owe, and by taking advantage of the various debt relief concessions that have been introduced to help people manage their finances.
The cities with the highest credit scores
Published by WalletHub, the report (opens in new tab) takes in almost 2,600 US cities, of which some 267 have a median credit score of at least 750 - the mark beyond which borrowers are accredited as having Excellent credit, and so should be able to take advantage of the lowest home loan rates from the best mortgage lenders (opens in new tab), and the most favorable credit terms generally.
After The Villages, the next-best credit scores are found in Sun City West, Arizona and Sun City Center, Florida, which both have an average of 789, while Green Valley, Arizona isn’t far behind with 788. The two California cities of Los Altos and Saratoga come next with 784, followed by Lexington and Needham, both Massachusetts, and Laguna Woods, California, at 781. Pittsford, New York and Mequon, Wisconsin complete the top 10 with a median score of 780.
The cities with the lowest credit scores
On the other side of the coin, it is the residents of Chester, Pennsylvania, East St Louis, Illinois, and Camden, New Jersey, who report the lowest credit scores right now, of just 552. With any score below 579 rated as Very Poor, those with such a low rating might expect to pay additional fees when applying for credit cards, and be offered far less favorable rates and terms on other forms of credit, if they qualify to borrow at all.
Detroit, Michigan is only slightly better at 560, while Gary and East Chicago, both Indiana, are next worst at 561 and 564 respectively. Those living in West Memphis, Arizona, and Harvey, Illinois, are not much further ahead at 566, with the low credit scores of all those mentioned, and millions more Americans, likely to present a real challenge.
How to improve your credit score
With the credit score required to secure a mortgage at a 20-year high (opens in new tab), and many people still needing to borrow simply to help make ends meet, taking the time to improve your credit score can really pay off. This means regularly examining your credit report, and looking for discrepancies that might be holding your rating back, and is particularly important given the surge in credit reporting errors (opens in new tab) that was noted last year.
Some may wish to hand responsibility for increasing their score over to the best credit repair services (opens in new tab), while others will prefer to do it themselves. Whichever path is taken, Jamie Wagner, Assistant Professor, Director, Center for Economic Education, Department of Economics – University of Nebraska at Omaha, says (opens in new tab) the difficult thing with improving credit scores is that there isn’t usually a quick fix.
“If you are working to improve your score it is going to take several months or years to increase a credit score depending on how low your score starts. My biggest tip regardless of trying to improve your score or not is to pay your credit cards or loan repayments every month. Pay your bills every month - payment history is a large part of your credit score. Additionally, I would recommend stop opening accounts or close accounts that you do not use.”