Cities With the Best and Worst Credit Scores

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Credit scores countrywide are on the rise, but some cities have higher credit scores than others.

Despite 2020 being a tough year financially for many people, average credit scores went up across the country, and borrowers who refinanced their car loan had stronger credit than ever.

According to RateGenius’ State of Auto Refinance Report, the average applicant who successfully refinanced their car loan had a credit score of 720 in 2021, up 43 points compared to five years ago.

While scores overall are strong, data reveals that average scores in some cities are better than others. Before we dig into the cities with the best and worst credit across the nation, here’s a breakdown of why your credit matters and what goes into calculating your score.

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Why Your Credit Score Matters

Maintaining a high credit score can help you get approved for low interest rates when you apply for new loans and apply to refinance old ones. Auto loan refinancing is the process of paying off your old car loan with a new loan that has better terms. The higher your credit score, the lower the interest rate you might be able to qualify for, which can lead to monthly and long-term savings.

The FICO score is what’s most often checked by lenders to determine creditworthiness. FICO scores range from 300 to 850, with 850 being the best possible score. Here’s a breakdown of the score ranges:

  • Exceptional: 800-850
  • Very good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Very poor: 300-579

What Do You Need To Qualify for Auto Loan Refinancing?

In general, you need good credit to refinance your car loan, but credit requirements can vary. The average score of borrowers who refinanced their car loan in 2020 using RateGenius was 700+. However, data shows that credit scores below 600 may be accepted if you have a low debt-to-income (DTI) ratio.

Your debt-to-income ratio is a percentage that shows how much of your monthly income goes to your monthly debt payments. You can calculate your DTI by adding up all of your monthly debt payments, dividing that total by your monthly gross income, and multiplying by 100. Some lenders might approve borrowers with a DTI as high as 50%, but below 36% is considered a good DTI.

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Loan-to-value or LTV is a percentage that expresses how much of your car value is covered by a loan and it’s another factor lenders consider. You can calculate your LTV by dividing your car loan balance by the value of your car. Lenders may be willing to refinance your auto loan with an LTV of over 100% in some cases (this means you owe more than the car is worth). However, you might need a stronger credit rating and lower DTI to qualify with a high LTV.

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What Affects Your Credit Score?

Five factors affect your FICO score, including your payment history, amounts owed, length of your credit history, credit mix, and inquiries. Below is a quick overview:

  • Payment history: Your payment history on open accounts. Missed payments can weigh heavily against your score in a negative way.
  • Amounts owed: How much debt you owe. One key aspect of this factor is credit utilization, a percentage that measures how much of your available credit lines you’re using.
  • Credit history length: The length of your credit history — longer is better.
  • Credit mix: The mix of account types you have, including revolving or installment accounts.
  • Credit inquiries: Having many hard credit checks can have a negative impact on your score.

Why Might Credit Scores Vary From One City to Another

Many factors, such as varying ages across locales, could be a reason why credit scores are different in each city. Older people may have better credit than younger people, and differences in that demographic could contribute to the variance. For example, RateGenius data shows Baby Boomers have an average credit score of 679, while Gen X has an average credit score of 646.

Income doesn’t directly affect your credit score, but income and cost of living could indirectly explain why credit scores might be higher in some places. A review of median household incomes showed that many cities on the best list had higher incomes than the worst list. Redmond (the city with the second-highest credit score), for example, has a median household income of $132,188, which is triple the median household income of some cities on the worst credit score list.

What might be the reason? Having more discretionary income can make it easier to keep up with bills — and payment history has the most weight on your credit score.

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10 Cities With the Best Credit Scores

These cities have highest average credit scores in the nation.

Rocky bay with a lighthouse in the distance in Connecticut | States with the best and worst credit scores

10. Schaumburg, Illinois

Credit score: 706

Fun facts: A suburb of Chicago, Schaumburg is home to one of the largest shopping malls in the country and the second-largest public library in Illinois.

9. Sioux City, Iowa

Credit score: 706

Fun facts: Sioux City, dubbed an All-American City twice by the National Civic League, sits on the Missouri River near the South Dakota and Nebraska borders.

8. Lombard, Illinois

Credit score: 707

Fun facts: Another suburb of Chicago, Lombard is known for its lilacs and annual lilac festival.

7. Mount Pleasant, South Carolina

Credit score: 707

Fun facts: Mount Pleasant overlooks Charleston Harbor and is popular for its seafood and the Patriots Point Naval and Maritime Museum.

6. Egg Harbor Township, New Jersey

Credit score: 708

Fun facts: Egg Harbor Township sits right out of Atlantic City and got its name because there were so many bird eggs in the meadows when the area was settled.

5. Saint Peters, Missouri

Credit score: 708

Fun facts: Saint Peters is less than an hour away from St. Louis and has been recognized by Money Magazine as one of the Top 100 Best Places to Live in America.

4. Quakertown, Pennsylvania

Credit score: 709

Fun facts: Nestled in small-town Pennsylvania, Quakertown is 50 miles north of Philadelphia and where the Liberty Bell was hidden during the Revolutionary War.

3. Milford, Connecticut

Credit score: 710

Fun facts: The city of Milford is about two hours away from New York City, and is known for its shipbuilding, oystering, and agrarian industries.

2. Redmond, Washington

Credit score: 720

Fun facts: 20 miles east of Seattle, Redmond is the 16th most populated city in Washington state. Major technology companies, including Microsoft, Nintendo, and AT&T, have locations here.

1. Arlington Heights, Illinois

Credit score: 728

Fun facts: Arlington Heights is the third Chicago suburb to make the list of top 10 cities with the highest credit scores. It’s known for its parks and being one of the largest cities in Illinois.

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10 Cities With the Worst Credit Scores

Here are the U.S. cities with the ten lowest average credit scores.

Windmill in the desert in Odessa, TX | Cities with the Best and Worst Interest Rates

10. Sequin, Texas

Credit score: 609

Fun facts: One of the oldest cities in Texas, Sequin sits right outside of San Antonio and has close to 30,000 residents.

9. St. Louis, Missouri

Credit score: 609

Fun facts: Maya Angelou and Joseph Pulitzer (the creator of the Pulitzer prize) are two famous St. Louisans. A must-visit location for Blues music and BBQ lovers, St. Louis sits on the Mississippi River with a population of 2.8 million people.

8. Fort Riley, Kansas

Credit score: 608

Fun facts: Home to 15,000 active duty service members, 18,000 family members, and 29,000 veterans, Fort Riley is a military installation and town in central Kansas.

7. Bessemer, Alabama

Credit score: 607

Fun facts: Named after inventor and engineer Sir Henry Bessemer, the city of Bessemer was founded in 1887 and sits in the Birmingham-Hoover metro area.

6. Port St. Lucie, Florida

Credit score: 603

Fun facts: Under an hour away from Palm Beach, Port St. Lucie is the 7th largest city in Florida and where the New York Mets host spring training each year.

5. Texas City, Texas

Credit score: 602

Fun facts: Texas City sits outside of Houston on Texas’ Gulf Coast and is known for its oil refineries.

4. Jackson, Mississippi

Credit score: 597

Fun facts: With a population of over 166,000 people, Jackson is where the first lung transplant took place and an important landmark in the history of the Civil Rights movement.

3. Roseville, Michigan

Credit score: 597

Fun facts: Roseville started as a farming community. Today, it’s part of the Detroit metro area and home to over 48,000 people.

2. Fort Bragg, North Carolina

Credit score: 581

Fun fact: About 57,000 military personnel and 23,000 family members call Fort Bragg home, and it’s one of the largest military communities in the world.

1. Miramar, Florida

Credit score: 575

Fun facts: Under an hour away from Miami, Miramar is a southeastern Florida city that means “Look at the Sea” in Spanish.

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Credit Is Something You Can Work On

If you have credit that falls below the “good” range, it doesn’t mean you have to be stuck with bad credit forever or that you’ll never be able to qualify for car loan refinancing. Establishing on-time payment history and reducing your credit utilization are ways to improve your score before refinancing.

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About The Author

Taylor K. Medine

Taylor K. Medine is a personal finance writer covering money management topics and finance products. She's written for finance publications such as Credit Karma, CompareCards, and MagnifyMoney. She runs the blog TayTalksMoney, which discusses how Millennials and Generation Z can live an abundant life on a tight budget.

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