Recent report shows cities with best and worst credit scores


According to a recent report by US News and World Report, most people do not know their credit score, or their city’s average for credit scoring. Knowing your score is important if you want to gain the best interest rate for a mortgage, auto loan or credit card. Research shows that a credit score that is excellent is usually based on an area’s general affluence. Therefore, locations with the best credit ratings are also characterized by elevated home values and income levels. However, that being said, the variances between cities exhibiting the best or worst credit scores is surprising.

For example, the average person in the 10 cities researched with the best scores makes about $104,000 per year compared to the person with the worst score who makes about $27,000 annually. The good credit’s group owns a home whose median worth is about $520,000 as well, which is almost 560% more than the bad credit group’s home worth of about $79,000.

Crime is also more prevalent in locations that have lower credit scores. The worst credit cities, according to data, average about 420 violent crimes each year compared to around 138 for the best credit locales.

The five cities with the best credit score ratings include:

  • The Villages, Florida
  • Sun City West, Arizona
  • Saratoga, California
  • Los Altos, California
  • Sun City Center, Florida

The worst ratings were compiled for the following cities:

  • College Park, Georgia
  • Forest Park, Georgia
  • Harvey, Illinois
  • East St. Louis, Illinois
  • Camden, New Jersey

The highest average rating was 779 for the Villages, Florida and the lowest average rating was 565 for Camden, New Jersey.

The findings showed that the average age in cities that had the best credit was 56 years old. The median age for the worst scores was 32 years of age.

There are also seems to be a strong connection between one’s credit rating and obesity. For example, Memphis is one of the five fattest cities in the US and is also in the bottom 10% when it comes to credit ratings. On the other hand, Boston is one of the top 10 slimmest cities in the country and enjoys credit ratings that are higher. In further support of this evidence, people who exercise regularly usually have excellent credit, according to a WalletHub survey representative.


Even rich households are turning to bad credit loans


Whenever we talk about payday loans, we often have a specific consumer in mind. We tend to think of an impoverished family who is about to miss their next rent payment or face the possibility of living in darkness becausese they didn’t pay their lighting bill. Therefore, since they don’t have the necessary funds before their next paycheck, they use a payday loan store.

It turns out that rich households are not only strapped for cash, but they’re also increasingly turning to bad credit loans to cover their broken down vehicle, a mortgage payment or faulty pipes.

According to a new study by The Brookings Institution, a considerable number of households earning $100,000 to $150,000 a year are having a hard time finding some cash for unforeseen events.

The report discovered that one-quarter of affluent households couldn’t come up with $2,000 within a month, and that doesn’t bode well for consumers in a fragile economy.

Researchers asked survey participants across all income levels if they could come up with $2,000 within 30 days to pay for an unexpected expense. Twenty-five percent of the richer participants conceded they couldn’t come up with the funds, while 19 percent said they could only do it if they were able to sell off their possession or turn to a payday loan business.

The study concludes that many Americans, rich or poor, are “financially fragile.” But to find that six-figure families do not have any savings is frightening, and suggests their money management skills aren’t good at all. So why is this exactly happening to wealthy households?

Study authors have honed in on a few key factors to determine why rich people can’t save:

  • Wealthy families are more likely to spend more.
  • A higher salary doesn’t equate to higher savings rate.
  • Some rich households are just stuck in old ways of spending dough.
  • The think-tank posits that higher earners are a lot more likely to get approved for immense mortgages, exorbitant lines of credit and other types of loans that poorer households wouldn’t make. Moreover, rich families are led into making mistakes and revising their priorities: spending comes first and saving comes second, or third, or fourth and so on.

    Brookings researchers add that affluent households have to deal with high costs of living because they want to live in specific neighborhoods where the housing prices are huge. Households also have to deal with child care expenses.

    Unfortunately, for the most part, Americans depend on instant gratification. This means that the more you earn the more you want to spend on non-essentials. For instance, a person making $25,000 a year will spend $100 a month on non-essentials, while someone making $125,000 will increase that discretionary spending to $1,000 a month.

    Finance blog Motley Fool opined that more money may actually hinder your savings goals:

    “In fact, earning more money might actually hinder your savings efforts if you use your higher income as a reason to justify unhealthy spending habits. That’s why good savers tend to have one thing in common, and it isn’t a six-figure salary; it’s a savings mentality. Simply put, if saving money is important to you, you stand a better chance of building up a sizable nest egg than someone whose mind isn’t geared toward saving money.”

    With even rich families turning to payday loans or selling off their stuff, it just amplifies the notion that more Americans need greater financial literacy, particularly from a young age and perhaps for the rest of their lives.

    This comes as Brookings recently published a paper calling for the need for regulations of small-dollar and payday loans in the United States.

    And this isn’t the first time that the organization discovered such results. In 2014, it released a study called “The Wealthy-Hand-to-Mouth,” which found that one-third of wealthy households live hand-to-mouth since they own illiquid assets.


    Number of people lying on insurance claims on the rise

    mouth with tape

    Every year in the United States, many people fill out insurance claim forms for all sorts of things from vehicle accident insurance claims to home insurance claims and more. However, a recent report has shown that many of those completing claims forms for their insurance companies do not always tell the truth and this could end up putting both their claim and their insurance policy at risk. In some cases, the errors and inaccurate information may have been a bona fide mistake but this will not stop the repercussions that can occur if insurance claims handlers discover that the information on the form is not accurate.

    A survey that was recently carried out amongst three thousand consumers showed that just over 50 percent of those completing an auto insurance claim did not tell the truth on their claims forms. The study, which was carried out by CoverHound, also found that both men and women were equally as likely to provide incorrect data on their claim forms and that younger people were more likely to lie on their claim applications than their older counterparts.

    A range of inaccuracies on claim forms

    Officials in the field have said that there is a wide variety of inaccuracies that have been found on insurance claims forms. Some of the information given is an out and out lie, where claimants have completely fabricated information in a bid to either boost the likelihood of getting a payout or to increase the amount that they are paid. In other cases, the mistakes and errors are down to the claimant using guesswork to complete the claim form because they do not know the answers to the questions being asked.

    However, when it comes to the assessment of insurance claims officials do not take into consideration whether the information was down to guesswork or a lie. Either way, incorrect information could result in a reduced payout, no payout at all, and even the voiding of your insurance policy altogether, which means that any premiums already paid will have gone to waste and getting another insurance plan will be made all the more difficult.

    One expert said that it doesn’t take long for claims handlers to get to the bottom of lies or inaccurate information, and that this often happens quite early on in the assessment process. With access to a range of information, resources and tools, claims handlers these days do not have to dig all that deep in order to determine whether a claim is accurate and correct or whether it contains errors or false information.