PHOENIX (3TV/CBS 5) – Residents of Glendale, Arizona have a median credit score of just 517, according to a recent WalletHub survey. This is the lowest median credit score among more than 2,500 US cities. “This very low median score shocked me,” said Jim Triggs, CEO of Money Management International. “FICO scores, credit scores are important for all kinds of reasons. It is the cost of credit, which is an important factor. But they also potentially matter for the type of job you can get.
Several factors go into credit scores, including how long a consumer has had credit, the amount owed, and payment history. For many people, credit scores plummet when bills pile up and go unpaid. “The most typical factor that would lower a credit score is lack of payments,” Triggs said.
It happened to Eric Tiernan. The Arizonan says he ended up with $68,000 in credit card debt. “I was married and didn’t watch finances well, and things got really out of control without me realizing it,” Tiernan told 3 On Your Side. “My credit rating had a significant impact with all of this.”
Tiernan initially tried to tackle the debt on his own, but exorbitant interest rates prevented him from making much progress. He decided to participate in a debt management program through MMI. With lower interest rates, Tiernan says he paid off the $68,000 debt in three years. “It’s a big deal,” he said. “There was no spare change. I had nothing left for a considerable time. It was hard.
Paying off debt will have an immediate gain on a credit rating. “It’s not necessarily going to increase a 515 to a 720 just because you paid off that debt, but it will have a major impact,” Triggs said. Consumers are entitled to free annual credit reports from Equifax, Experian and TransUnion.
While Glendale is at the bottom of the median credit score list, two Arizona communities landed at the top of the list. Sun City West came second with a median credit score of 792, while Oro Valley came third with a median credit score of 789.
What is a good credit score?
- 750-850: excellent
- 700-749: Good
- 640-699: Just
- 300-639: Bad
- Source: WalletHub
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