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Your city’s credit score

By Janna Herron · Bankrate.com
Wednesday, October 19, 2011
Posted: 2 pm ET

Cheeseheads boast the highest credit scores in the country.

That's the takeaway from Experian's credit study released last week that breaks down a city's average credit score, based on VantageScore credit ratings, which range from 501-990. Four of the top 10 spots were taken by cities in Wisconsin. Wausau took No. 1 with a score of 789. Madison came in No. 3 with 785, Green Bay was No. 6 with 780 and La Crosse eked in at No. 10 with 777.

Midwest cities claimed four more places in the top 10: No. 2 Minneapolis; No. 4 Cedar Rapids, Iowa; No. 8 Peoria, Ill.; and No. 9 Sioux Falls, S.D. San Francisco and Boston rounded out the top 10.

As for the cities with the lowest scores, all but two hailed from the South. And Texas had four cities in the bottom 10. Here's how the worst panned out:

1. Harlingen, Texas: 686
2. Jackson, Miss.: 701
3. Corpus Christi, Texas: 702
4. Monroe, La.: 706
5. Shreveport, La.: 706
6. Augusta, Ga.: 709
7. Bakersfield, Calif.: 709
8. Las Vegas: 709
9. Tyler, Texas: 710
10. El Paso, Texas: 710

The disparity may surprise you (as it did for me). But many factors come into play. Some places, such as Las Vegas and Bakersfield, Calif., have been ravaged by the housing crisis, so many residents have credit reports blighted by a foreclosure or short sale.

Other cities at the bottom suffer from high unemployment or rampant underemployment, making it harder for residents to meet their financial obligations every month. Maybe they rely on credit cards to get by and find they can't pay the bill every month.

Also, creditors don't market as heavily in the Midwest as they do along the coast, because the population is smaller and average incomes are lower, says John Ulzheimer, president of consumer education at SmartCredit.com.

"That means people in those areas have fewer credit cards and less debt," he says.

But does it really matter what the average credit score is for your city when you have your own?

It might make a difference what kind of credit card offer you receive in the mail or how many of them you get a week, says Ulzheimer.

Creditors must be careful to not avoid an area consciously, a practice called redlining, he says. But some credit card companies will market far more aggressively in one market versus another or offer a certain type of card in one area that would appeal to those residents, Ulzheimer says.

What that means is the credit card offer you get in the mail actually may not be suited to you personally, even though it's generally appropriate for your ZIP code. Always research your options for credit cards by checking the terms, credit limit, annual percentage rate and fees associated with the card.  Then, let your credit score speak for you.

Where does your city rank? And does it surprise you? (For a complete listing, check Experian's Oct. 11 press release.)

Follow me on Twitter: @JannaHerron

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