Las Vegas’ credit score among lowest in U.S., Experian says

Add this to our list of dubious economic distinctions. Las Vegas, which for months has been stuck at the top of national rankings for foreclosures and unemployment, now ranks near the bottom of a national ranking of average credit scores.

Credit rating agency Experian on Tuesday released its annual State of Credit list, which showed Las Vegas with the nation’s eighth-worst average credit score, 709. That put the city at No. 136 in the 143-city listing. Harlingen, Texas, had the worst average score, 686, followed by Jackson, Miss., 701, and Corpus Christi, Texas, 702.

On the bright side for locals, Experian data show that the average debt in Las Vegas for this year is $24,975, a drop of 6.4 percent from 2010 and drop of 8.9 percent from 2007. The average number of late payments was 0.66, a drop of 12 percent from 2010, but an increase of 20 from 2007.

And, Experian said, Las Vegans, on average, had 1.68 open credit card accounts, down 2.1 percent from 2010 and down 29.1 percent from 2007.

Experian said five of the bottom 10 markets have raised their credit scores and cut their debt since 2010. However, Experian said, average debt nationwide dipped by about 1 percent, to $24,542, suggesting that people are struggling to improve their debt-to-credit ratios. Low debt-to-credit ratios are important elements of a high credit score.

The national average credit score is 749, Experian said, down from 754 in 2007 before the recession. Wausau , Wis., had the nation’s best average credit score, 789, followed by Minneapolis (787) and Madison, Wis. (785).

Maxine Sweet, vice president of education for Experian, said those high foreclosures, which weigh down individual credit scores, have helped keep local credit scores low. Joblessness hasn’t helped either, she said.

“When unemployment stretches longer and longer, people may use up that money they’ve saved for emergencies, and when that happens, they start to what rely on their credit cards,” Sweet said from New York. “So instead of being a convenience and being something you pay off in full every month, credit cards become another way that you build debt. And that’s not how you should be using credit cards.

“If people get far over their heads (in debt), they stop making payments on their credit cards,” Sweet said.

Las Vegas’ average credit score also dropped, Sweet suggested, because credit card issuers, looking to save costs, started closing inactive accounts. Fewer cards changed people’s utilization, or balance-to-limit ratios, which measure outstanding debt against total credit limit. For example, someone with an $800 balance outstanding against two active cards with a combined $20,000 limit would have a lower utilization ratio, and be seen as a lower credit risk, than someone with that same $800 balance against a single card with a $10,000 limit.

And, noted Cena Valladolid, chief operating officer of the Consumer Credit Counseling Service in Las Vegas, if the credit card account closed was the user’s oldest, it would wipe away years of possibly good credit history, which could also damage credit scores.

So could bankruptcies, she said., citing Automated Access to Court Electronic Records data, reported that Nevada led the nation in personal bankruptcy filings in 2010 with 11.1 filings for every 1,000 people.

“This score really speaks to how hard our region has been hit,” Valladolid said. “If people have been hit with the highest foreclosure rates and the highest unemployment, that’s a certain formula for not being able to pay your bills.”

She said the jobs and housing markets will need to improve for the average credit score, and economy, to improve locally. Valladolid said her agency, which is approved by the Department of Housing and Urban Development, offers free programs to help Las Vegans work with creditors, improve budgeting and help locals regain their financial footing.

Contact reporter Matthew Crowley at or 702-383-0304.

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