Credit statistics are easy to come by but it might surprise you that the people of Wisconsin have the highest credit scores in the United States, with 10 Southern states rounding out the bottom ranks. Many people are familiar with Wisconsin as a state of breweries, cheese, and, of course, the Green Bay Packers, but did you know that this state also has some of the best credit scores in the country? Well, you will now!
A recent Experian study found a significant difference between regional demographics in United States metropolitan areas. The results are quite interesting with Wisconsin leading the chart, with four cities ranking near the top. Eight cities in the Midwest also rank above average while the 10 lowest-ranking cities are all located in the South.
While it might be confusing to see that Wisconsin – known for diligent German and Scandinavian immigrants, Cheesheads, and Midwestern sensibilities – it makes much more sense when you observe the regional disparities between the Midwest and other parts of the country. Facts are facts and the Midwest, quite simply, is also home to a well-insulated economy. Numerous studies show that the Midwest states are not hit quite as hard during a financial downswing, which is exactly what statistics are finding right now. Thus, families and businesses in the Midwest do not suffer as much as the coastal economies during a recession.
According to Michael Collins, a consumer science professor at the University of Wisconsin in Madison, the Badger State reports bankruptcies and foreclosures at a rate that is noticeably lower than the national average. Of course, he also notes that the region does not necessarily feel economic booms as greatly either so it does, in a way, even out. Still, most people would probably take financial stability over dramatic changes, especially in a tough economy like this one.
Michele Raneri, vice president of analytics at Experian, stresses that these statistics are incomplete. Unemployment and the average home value, for example, are not accounted for when determining average credit scores in a particular region. She emphasizes that credit scores simply reflect the consumer’s ability to make payments on open accounts. Of course, areas with major economic instability (high unemployment rates, drastically reduced home values) also have fluctuating credit scores based on consumer inability to repay debts.
She puts it quite succinctly:
The Midwest pays better on time. 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.
Obviously, the other side of this study is much more dramatic. Unfortunately, Southern states have not had an easy time recovering from the near-economic fallout. In fact, the South has always had trouble keeping pace with more receptive economies of the Northern states and the most recent recession did away with more tens of thousands of the manufacturing jobs that sustained life in the region.
In light of Experian’s study, the city with the lowest average credit score was Harlingen, TX. This city, on Texas’ southern-most tip and nearest to the Mexican border, recently posted an unemployment rate of 11.6 percent, which ranks them 343 out of 370 metro areas. Still, Lupe Gonzales, the chairman of the Chamber of Commerce in Harlingen, says that he is surprised by the statistic. There are many people looking for work in Harlingen, he says, but, more importantly, home sales and auto sales both appear to be up or, at the very least, consistent. People are, indeed, looking for work, but much of their economy is seasonal so they expect a boom in the winter months to come.