America's Best Credit Scores? These U.S. Cities Have Better Credit Than You'd Expect

America's Best Credit Scores? These U.S. Cities Have Better Credit Than You'd Expect

By many measures, sunny Los Angeles is no financial paradise: Compared to other big U.S. cities, La-La Land struggles with low household income, a surfeit of low-wage jobs, and relatively high unemployment and low educational attainment.

That's why its median credit score — 644 — is actually pretty impressive, according to a study by CreditCards.com. The report estimated that credit scores in L.A. are over 15 points higher than they should be — considering city residents' financial challenges and the fact that the population skews young, and young people tend to have lower scores.

The study looked at residents in the 25 largest U.S. cities, and then ranked each city by the best scores, which were adjusted for socioeconomic factors like age, income, and employment levels.

The top cities, in order? 

(1) Los Angeles
(2) Minneapolis 
(3) New York
(4) Chicago
(5) Boston

Average credit scores in Minneapolis — the number two city — not only exceeded what the data predicted, but actually were higher than all other big cities, at 704. The average VantageScore, the type of credit score the study looked at, is 671 in the United States.

Unfortunately, not all cities studied had such high credit scores.

Topping off the list of worse-than-expected credit scores was Baltimore, whose home-state of Maryland has the highest median income in the country.

(1) Baltimore
(2) Washington, D.C.
(3) Tampa-St. Petersburg
(4) Miami-Fort Lauderdale
(5) Atlanta

While Baltimore technically has a higher absolute median credit score (667) than Los Angeles, the analysis found that the city lags by 17 points when you factor in its high income and employment figures.

In Los Angeles there are low levels of divorce — which tends to be financially disruptive — plus City of Angels' residents feel social pressure to conform when it comes to financial status symbols like credit scores, Natalie Lohrenz, a credit counselor from Orange Country, told CreditCards.com.

It's hard to say exactly why Baltimore and D.C. scores were lower than expected, though the main culprit could be high credit utilization — aka carrying high balances relative to credit limits — which accounts for a full-third of one's credit score.

Read more:
• Low Credit Score? Improve Yours ASAP in 3 Simple Steps
• The Friend Who Always Pays for Dinner Is Playing You for Credit Card Points
• How Credit Cards Can Hurt America's Low-Wage Workers