Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We earn a commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.
Having a good credit score is the key to unlocking the lowest available interest rates on loans, the best rewards credit cards and even that next apartment you’ve been eyeing.
There are many factors that play a role in having a solid credit score, and while where you live doesn’t magically raise it, there are certain cities that stand out for giving their residents better opportunities to improve their finances, which, in turn, can help to improve one’s credit. For example, a large part of building good credit is being able to pay off debt, something that’s easier to do in cities where the unemployment rate is lower and the minimum wage is higher than it is in other cities.
A recent study by researchers at Upgraded Points™ took a look at 60 of the largest cities throughout the US, analyzed eight different factors — average credit scores, credit card debt, interest rates, cost of living, unemployment rate, minimum wage, personal income and the amount of available financial advisors — and used this information to reveal the best US cities for building your credit score.
Subscribe to the Select Newsletter!
Our best selections in your inbox. Shopping recommendations that help upgrade your life, delivered weekly. Sign-up here.
The top 10 best cities for building your credit score
The study determined the following 10 US cities to be the best for building your credit score:
- Boston, MA
- San Jose, CA
- Rochester, NY
- Albany, NY
- San Francisco, CA
- Minneapolis, MN
- Salt Lake City, UT
- Syracuse, NY
- Madison, WI
- San Diego, CA
Boston, San Jose and Rochester took first, second and third place, respectively, as the best cities to bump up your credit score. The minimum wage is higher in each of these cities, with Boston having an average minimum wage of $14.25 per hour, one of the highest in the US Having a comparatively low unemployment rate of 3.7% also helped Boston earn the top spot, as did having interest rates of 3.81%, the lowest of all the cities that were analyzed.
In addition to higher minimum wages, other common threads across the top three cities include lower unemployment rates, a lower cost of living, higher average credit scores and an abundance of financial advisors.
Of the top 10 cities, Salt Lake City has the lowest cost of living index, while the three New York cities that made the list — Rochester, Albany and Syracuse — reveal an average cost of living index that is 30% cheaper to live in than the national average.
Regarding the amount of available financial advisors, Boston has 121 of them per capita, while some of the places on the list of worst cities for building credit, which we’ll get into next, have significantly fewer resources for their residents — Austin, for instance , has just 70 available advisors per capita, while New Orleans and Oklahoma City each have 30 available advisors per capita.
If you’re looking for tools to build your credit score, consider getting one of them best card’s for building credit. Select ranked the Discover it® Secured Credit Card as one of the best credit cards to help increase your score.
Discover it® Secured Credit Card
On Discover’s secure site
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
Discover will match all the cash back you’ve earned at the end of your first year
Balance transfer fee
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Foreign transaction fee
Instantly raise your credit score today no matter where you live
Experian Boost™ is a free feature that lets you add your on-time payments to select phone, internet, cable, utility (gas, electricity, water) and streaming services such as Netflix®, HBO™, Hulu™ and Disney+™ to your Experian credit report. According to the website, users, on average, received a 13-point increase in their FICO® Score.*
To get the rankings, each factor was assigned a certain numerical amount based on its importance relating to boosting one’s credit score, which was then converted to a number between 0 and 5, calculated (click here for more on their methodology) and ranked accordingly to determine the cities that were most conducive to improving one’s finances and, ultimately, one’s credit score.
The worst cities for building your credit score
The study determined the following 10 US cities to be the worst places to build your credit score:
- Houston, TX
- El Paso, TX
- Dallas, TX
- New Orleans, LA
- San Antonio, TX
- Memphis, TN
- Austin, TX
- Atlanta, GA
- Oklahoma City, OK
- Nashville, TN
One obvious observation here is the prevalence of cities in Texas showing up on the list — in fact, they make up half the list.
Despite a low cost of living, Texas residents have a lot working against them — an average credit score of 674 (one of the nation’s lowest), the highest average credit card debt in the country (at $5,308) and a minimum wage of just $7.25 per hour, one of the lowest in the US In Houston specifically, which takes the No.1 spot for the worst city to build your credit score, the unemployment rate is currently at 5.3%, compared to Boston’s unemployment rate of 3.7%.
Across the 10 worst cities, the average credit score lands at 675, significantly lower than the average credit score across the 10 best cities, which is 713. By contrast, as the number one best city overall, Boston has a high average credit score of 720.
While where you live won’t send directly your credit score soaring, every major US city offers certain external variables such as minimum wages, unemployment rates and the cost of living, among others. These factors can end up playing a role in helping you develop your finances, which, in turn, can help you build up and manage your credit score.
The study really drives that home, showing that it’s easier to improve your credit score when the city you live in offers greater financial opportunities to its residents.
Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram swear Twitter to stay up to date.
For rates and fees of the Discover it® Secured Credit Card, click here
*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff alone, and have not been reviewed, approved or otherwise endorsed by any third party.