TransUnion has revealed a ranking of metropolitan areas with the highest and lowest consumer credit score in the country.
The metropolitan areas ranking at the top of the list are: SanJose-Sunnyvale-Santa Clara, Calif. and San Francisco-Oakland-Freemont, Calif. The Memphis, Tenn. metropolitan area ranked lowest.
The ranking is the first of its kind from TransUnion, which compiled the credit scores of the top 100 largest [Core Based Statistical Areas] CBSAs and determined the ten CBSAs with the lowest credit score based on the highest average consumer credit risk and the ten CBSAs with the highest credit score based on the lowest average consumer credit risk.
"Just as an individual's credit score is a measure of the risk that consumer presents to a lender, our study calculated the credit score that would correspond to the risk presented on average by residents of various metropolitan areas," said Heather Battison, senior director at TransUnion responsible for consumer education. "We want to congratulate those cities that have the lowest average credit risk, or the highest credit scores - and help educate those with high credit risk, or low credit scores."
The CBSA credit score used in the study is based upon the VantageScore credit score, a model developed by all three major credit reporting companies. Consumer scores fall within a range of 501 to 990, with higher scores representing a lower likelihood of risk to lenders.
At TransUnion.com, each score delivered is accompanied by a letter grade. (901+ = A, 900-801=B, 800-701=C, 700-601=D, and 600-501=F). Among others, VantageScore is currently used by 4 of the top 5 financial institutions and all of the top 5 credit card issuers.
"Because lenders have so many scoring models at their disposal, it's rare when the credit score they receive for a consumer and the score the consumer obtains for himself actually match, and that causes a lot of confusion," said Battison. "That's why the A-F, academic-style letter grade that comes with every VantageScore credit score consumers obtain at TransUnion.com is so beneficial. If my grade is an 'A', I innately understand that means a lender is likely to view my creditworthiness in a very positive light; and that's primarily what I want to know."
The term "Core Based Statistical Area" is a collective term for both metropolitan and micropolitan areas. A metro area contains a core urban area of 50,000 or more population, and a micro area contains an urban core of at least 10,000 (but less than 50,000) population.
Top 10 Core Based Statistical Areas with the highest credit scores:
1. San Jose-Sunnyvale-Santa Clara, Calif. - 700
2. San Francisco-Oakland-Fremont, Calif. - 696
3. Madison, Wis. - 694
4. Honolulu, Hawaii - 693
5. Minneapolis-St. Paul-Bloomington, Minn. - 691
6. Bridgeport-Stamford-Norwalk, Conn. - 690
7. Boston-Cambridge-Quincy, Mass.-N.H. - 689
8. Oxnard-Thousand Oaks-Ventura, Calif. - 685
9. Portland-South Portland-Biddeford, Maine - 685
10. Seattle-Tacoma-Bellevue, Wash. - 685
Top 10 Core Based Statistical Areas with the lowest credit scores:
1. Memphis (Tenn., Ark., Miss.) - 638
2. McAllen-Edinburg-Mission, Texas - 639
3. Jackson, Miss. - 642
4. El Paso, Texas - 650
5. Columbia, S.C. - 650
6. Las Vegas-Paradise, Nev. - 650
7. Little Rock-North Little Rock-Conway, Ark. - 651
8. Baton Rouge, La. - 651
9. Lakeland-Winter Haven, Fla. - 651
10. Augusta-Richmond County (Ga., S.C.) - 651