How People in the South Can Raise Their Credit Scores
NEW YORK, March 14, 2023 (Newswire.com) - Credello: A 2022 study of credit trends by the Fair Isaac Corporation found that many of the southern U.S. metropolitan areas had the country's lowest credit scores. Why is that?
Houston, Miami, and San Antonio residents have the lowest credit scores
While the national average FICO score sits at 716, cities in the South are seeing scores that don't even hit 700. Three of the largest cities, Houston, Miami, and San Antonio, averaged credit scores of 696, 695, and 694, respectively. What's causing this trend of lower credit levels south of the Mason Dixie?
Why do these cities have such low average credit scores?
One potential issue is a lack of prioritizing financial education, emphasizing credit report facts and the importance of credit scores. Many schools around the U.S. do not offer basic personal finance courses in their curriculums, making it difficult to set a good foundation for young adults to build strong credit.
Additionally, the cost of living in some southern cities is higher than those earning at the state minimum wage can easily afford, leading to high monthly payments on bills and a lack of available credit. Higher prices also mean that people may not be able to afford to keep up with their minimum monthly payments and end up defaulting on their loans.
There is also the potential issue of how state-sponsored aid could factor into things. Many New England and Midwest states had the country's highest average credit scores, ranging from 734 - 742. Interestingly, some of these states also offer generous state-sponsored care regarding healthcare, Medicaid expansion, and job development programs.
Conversely, Florida opted not to expand Medicaid with the Affordable Care Act, leaving many residents to face the burden of medical costs alone. Texas voted to reduce SNAP benefits (food stamps) recently, making it more difficult for families to afford the cost of food. While these aren't directly linked in the study, it's clear that there's a correlation between government aid availability and credit scores.
In general, the South faces many economic challenges impacting residents' finances. This includes a lack of jobs and lower wages, which can lead to less disposable income available to pay off debts. Southern cities also have a greater percentage of low-income residents who are more likely to need assistance with basic financial tasks like paying rent or bill payments.
What can residents do?
If you're in one of these cities and interested in getting your score above the average number, there are a few things you can do:
1. Learn about personal finance - One of the most important things you can do to improve your credit score is to learn about personal finance. Get involved in your community and find resources to teach you about budgeting, investing, and debt management.
2. Stay on top of your bills - Make sure you are always aware of what you're spending and pay all of your bills on time. This will help build a good credit history and show lenders you take responsibility for your finances.
3. Play by the rules - Don't overextend yourself or take on too many loans you can't afford to repay. Follow the guidelines set out by lenders and stick to a realistic repayment schedule. This will help improve your credit score over time.
4. Monitor your credit score regularly - All three credit bureaus (Experian, Equifax, and TransUnion) offer one free yearly credit report. But there are other ways to monitor your credit score. Apps like CreditKarma and Mint can do "soft" pulls every week that show you any changes in your report without hurting your score.
The bottom line
Regardless of where you live in the US, the more you understand personal finance and how your credit score affects your borrowing options, the better off you'll be. Take some time to explore what options are available to you and put these steps into practice, and you'll be on your way to building a solid credit history.
Credello is a financial tech company offering a personal finance tool that simplifies financial decisions through personalized, on-demand recommendations — so users can borrow, save, or invest with confidence. Credello believes that finding the right financial product should be as easy and interactive as online shopping, and we are on a mission to make that possible. For more information, please visit https://www.credello.com.Contact Information:
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Original Source: How People in the South Can Raise Their Credit Scores
Lifestyle - Sexy Press originally published at Lifestyle - Sexy Press