Research and Statistics

Wisconsin credit scores outrank all others, the South takes bottom 10


Of the 10 cities with the highest average credit scores, eight are in the Midwest — including four in Wisconsin. The bottom 10 are all in the South

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Known for its breweries, cheese and the Green Bay Packers, the state of Wisconsin can now lay claim to another valuable prize: having some of the nation’s highest credit scores.

A study released this week by the credit reporting agency Experian found big regional differences when examining the average credit scores of U.S. metropolitan areas. Experian used the VantageScore algorithm, whose score range is from 501 to 990.

All of the 10 cities with the lowest average credit scores are in the South. Of the 10 cities with the highest average credit scores, eight are in the Midwest — including four in Wisconsin.

Why Wisconsin? Is it the legacy of hard-working German and Scandinavian immigrants? Midwestern farmland frugality? Something in the milk?

 Highest credit scores in Wisconsin, study says

Those are possibilities, but a more likely explanation for the regional differences in credit scores has to do with the economy.

Michael Collins, a consumer science professor at the University of Wisconsin-Madison, points out that Wisconsin has lower-than-average rates of bankruptcies and foreclosures, which suppress credit scores. The Midwest’s economy is also more impervious to big swings, so it didn’t suffer as badly as other regions in the recent downturn.

“Since the region never had the boom, the bust is relatively less bad,” he says.

The highest average credit score goes to Minneapolis, followed by Madison, Wis., then Wausau, Wis. Each of those cities had unemployment rates substantially below the national average in July.

Michele Raneri, Experian’s vice president of analytics, emphasizes that economic indicators such as unemployment and home values are not considered in compiling credit scores — that the scores are merely a measure of someone’s ability to pay debts. But in areas where there is high unemployment and plunging home prices, there are often lots of people struggling with bills, which typically drives down credit scores.

The Midwest, she says, traditionally has had a strong track record.

“The Midwest pays better on time,” she says. “In terms of recent history, part of the reason their scores are so much better than the average is that they didn’t have that artificial home-value bubble that a lot of other regions did.”

South hit by double economic whammy 

The South, on the other hand, has always lagged economically behind the rest of the country. The region made great strides in the 1980s and ’90s, but the 2001 recession destroyed tens of thousands of manufacturing jobs. The 2007-2009 recession then applied the “coup de grace,” says Ferrel Guillory, who studies Southern social and economic trends as a senior fellow at workforce development think tank MDC Inc. in Chapel Hill, N.C.

“It doesn’t surprise me at all that a lot of Southerners — the working poor or the working near-poor — would be stretched thin on credit, trying to make ends meet, trying to weather the storm,” he says.

The city with the lowest average credit score, according to Experian, is Harlingen, Texas, near the Mexican border at the state’s southernmost tip. Nearby Corpus Christi has the third lowest, after Jackson, Miss.

Lupe Gonzales, chairman of Harlingen’s Chamber of Commerce, says he’s surprised by the finding. He acknowledges that the city has plenty of people looking for work: At 11.6 percent in July, the city’s unemployment rate ranked 343rd of 370 U.S. metro areas.

But as he drives around town, he sees plenty of cars and trucks with paper license plates, indicating new vehicle sales. He says home sales are on the rise, the local malls do a brisk business by drawing day shoppers from nearby Mexico and plenty of “winter Texans” boost the economy by spending months there avoiding cold weather up North.

“You have your ups and downs,” he says. “We all wish the economy in our area was a little better, but we don’t hurt.”

Other interesting tidbits from the report:

  • Experian also gave props to Bakersfield, Calif., and Las Vegas for improving their average credit scores compared with last year and pulling themselves out of the bottom 10.
  • Nationally, the average credit score improved by one point over 2011.
  • Corpus Christi led the nation in late payments. Sioux Falls, S.D., had the lowest average number of late payments.
  • Boston, San Francisco and Rochester, N.Y., tied for having the most open credit card accounts, at an average of 2.26. Jackson, Miss., had the fewest, with an average of 1.36.
  • Reno, Nev., had the highest average debt, at $27,320. La Crosse, Wis., had the least, at $21,113.


Top 10 Bottom 10
1. Minneapolis, Minn., 7871. Harlingen, Texas, 688
2. Madison, Wis., 7862. Jackson, Miss., 702
3. Wausau, Wis., 7853. Corpus Christi, Texas, 706
4. Sioux Falls, S.D., 7844. Shreveport, La., 708
5. Cedar Rapids, Iowa, 7835. Monroe, La., 709
6. San Francisco, 7836. Augusta, Ga., 710
7. Green Bay, Wis., 7817. El Paso, Texas, 710
8. La Crosse, Wis., 7798. Myrtle Beach, S.C., 710
9. Boston, 7789. Memphis, Tenn., 711
10. Duluth, Minn., 77710. Savannah, Ga., 713
Source: Experian
Notes: Score used is the VantageScore, whose range is from 501 to 990.

See related: San Antonio leads the list of 25 cities with most credit card debt, The South: We’re poor, overweight — and we’ve got low credit scores

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