Whether you realize it or not, your credit score impacts your everyday life. It dictates where you can live, your ability to be hired, your income and could even affect your trustworthiness in romantic relationships.
If you have a low credit score, building it takes time and dedication. It involves reducing your credit card debt so you don’t have to pay interest, making a stable income to pay bills on time, and limiting your everyday expenses in order to save.
To help people find ways to rebuild their credit, we examined the best and worst cities for repairing your finances.
We looked at cities with an average credit score of 620 and below and analyzed them based on factors such as credit card debt per resident, cost of living and unemployment rate to understand which ones had the most opportunities (see methodology for complete scores and weights).
For comparison, here are the U.S. averages:
These cities have a poor average credit score, but a high opportunity. Therefore, they are the best places to live when you are trying to repair a bad credit score.
Laurens, SC, is a small city of 8,931 people, located in the northwest corner of the state. It’s known for its Historic Downtown Square, where the annual Squealin’ on the Square festival and barbecue competition is held.
This charming city may have an average credit score of 615, but it has worked to provide opportunities for its citizens. Its unemployment rate has been consistent with the national average, it has a low median credit card debt of $1,756 and the cost of living index at 83.1 is significantly lower than the national average of 100.
Just south of Memphis, Horn Lake, MS, is known for housing the honeymoon cottage that belonged to Elvis Presley. This romantic Mississippi city prides itself on a strong community spirit and a thriving economy.
With an 85.4 cost of living index, this city allows for the savings you need to repair your credit. Horn Lake also features a median credit card debt of $1,687, which is low compared to the $2,550 average. Its unemployment is lower than the national average at 3.7 percent.
Hamtramck, MI, was founded in 1798. A city of 26,804 people, it’s located only five miles from the bustling city of Detroit. Citizens of Hamtramck look forward to the annual Hamtramck Music Festival in March and the St. Florian Strawberry Festival every May.
This city provides the opportunity to increase your credit score while having access to the amenities of a big city. With a median credit card debt that’s $1,000 below the U.S. average and a max interest rate of 5 percent in the state, there are plenty of opportunities to reduce debt and grow credit scores. The cost of living is lower than average and only one in 300 renters are being evicted, which makes this city even more appealing for those trying to rebuild their finances.
In the northeastern part of South Carolina, Darlington is known by NASCAR fans for the Darlington Raceway and the National Motorsports Press Association Hall of Fame. Aside from racing, this city is recognized for its tobacco auctions and fields of cotton.
At 76.1, Darlington has a favorable cost of living, making it an appealing place to reside if you’re aiming to repair your finances. It also features a low unemployment rate and lower-than-average median credit card debt.
Not far from the Big Apple, New Brunswick is New Jersey’s fastest-growing urban center. Rich in history, this city of 56,792 people is known as the first place to celebrate Independence Day and was the site for one of the nation’s first public readings of The Declaration of Independence.
As the best place to repair your bad credit, New Brunswick offers a significantly low median credit card debt of $1,492 and has a lower-than-average unemployment rate of 3.6 percent. These factors outweigh the slightly higher cost of living score of 121.3. With access to New York City (cost of living of 209), this city provides ample opportunities at a lower price point.
These cities have a poor average credit score and have a low opportunity. Therefore, they are the worst places to live when you're trying to repair a bad credit score.
With an average credit score of 583, citizens of Suitland have a hard time building their finances due to the higher than average unemployment rate of 4.3 percent, high cost of living of 125.5 and relatively high median credit card debt of $2,426.
A suburb of Chicago, Maywood is known for its historic architecture and offers both white and blue-collar jobs. Unfortunately, this ethnically diverse community has struggled with high crime rates and low opportunity for growth.
An above-average unemployment rate of 6.7 percent, high median credit card debt of $2,022 and high cost of living make it difficult for citizens of Maywood to dig themselves out from an average credit score of 590.
Located along the Nantucket River, Waterbury is home to 109,250 people. This Connecticut city is nicknamed “The Brass City” due to its industrial endeavors in the brass manufacturing industry.
Although this city meets the national average in cost of living, it struggles with a high unemployment rate of 6.8 percent and high credit card debt with a median of $1,920. These factors make it hard for citizens to build their credit from the 614 average score.
As New Jersey’s third-largest city, Paterson is known as “Silk City” due to its role in silk production in the late 19th century. As America’s first planned industrial city, it also has ties to the manufacturing of steam locomotives, continuous rolls of paper and airplane engines.
Despite these industrial pursuits, Paterson has higher than average unemployment at 7.7 percent. Citizens also face a cost of living of 122.5 and median credit card debt of $1,943, making it hard to bring up their average credit score of 601.
Just south of Chicago in Cook County, Dolton is a city of 23,091 citizens. It has been known for producing various items such as bakery equipment, brass castings, shipping containers, cement, furniture, agricultural equipment, steel tanks and chemicals.
Despite offering a variety of professions, Dolton has the least amount of opportunity for improving your finances. It has a high unemployment rate of 7.1 percent, an average cost of living score of 99.7 and high credit card debt at $2,077. These factors make it the most difficult city in which to rebuild a bad credit score.
This study was conducted in August 2019.
When analyzing the best and worst cities for repairing bad credit we began with cities that had an average credit score of 620 or below, which is considered poor. This data was pulled from the list of 500 cities with the worst credit score. We then looked at six factors and gave them a score from one to 70. We weighted the scores as follows:
Unemployment is the biggest factor because jobs affect if you’ll be able to pay rent on time and pay off credit cards consistently. For this reason, we valued the unemployment rank at 30 percent. We pulled the data for this category from BestPlaces.net.
The median rate of credit card debt in a city speaks to the spending habits of that location and if they will have a chance to recover their finances or continue to build debt. The amount of debt you have also directly impacts your credit score. For this reason, we valued it at 25 percent. We pulled data for this category from the WalletHub Cities With Lowest and Highest Credit Card Debts database.
Cost of living is important because if a resident has to spend all their earnings on living, they won’t be able to save and will likely accumulate credit card debt. For this reason, we valued it at 20 percent. We pulled the data for this category from BestPlaces.net.
The eviction rate indicates if residents are in a stable environment and able to consistently pay rent. A location that has a lower eviction rate is an indicator that residents have the ability to pay rent, so we valued this at 10 percent. We pulled the data for this category from Eviction Labs (2016 data).
The maximum interest rate a state can charge will influence the trends of those borrowing money and their ability to get out of debt. For this reason, we valued it at 10 percent. We pulled data for this category from CUNA.
The amount of school funding per student is an indicator of the quality of life in that city. Those investing more in schools prioritize education and look to better themselves and future residents. For this reason, we valued school funding at 5 percent. We pulled the data for this category from BestPlaces.net.
For the United States national averages the average median credit card debt is based on the average of the 51 states, pulled from WalletHub’s database. The cost of living is based on the cost of living index. The average U.S. unemployment rate is collected from BestPlaces.net so that there is consistency when comparing the unemployment rate of the different cities.
|Rank||City||Average Credit Score||Eviction Rate (per 100)||Cost of Living||Unemployment Rate (%)||State Max Interest Rate (%)||Median Credit Card Debt||School Spend Per Student||Total Score|
|1||New Brunswick, NJ||578||0.01||121.3||3.6||6||$1,492||$25,405||51.05|
|4||Horn Lake, MS||607||11.9||85.4||3.7||8||$1,687||$6,979||44.95|
|6||Forest Park, GA||583||8.42||88.2||4.8||7||$917||$9,525||43.35|
|9||Atlantic City, NJ||590||0.01||84||7.7||6||$1,299||$24,368||41.6|
|12||Chicago Heights, IL||617||2.3||92.7||6.2||5||$1,805||$14,937||39.3|
|15||East Chicago, IN||588||3.34||78.9||6.6||8||$1,653||$14,925||38.95|
|19||Calumet City, IL||603||3.24||93.1||6.5||5||$1,751||$15,549||38.05|
|20||Maple Heights, OH||612||1.05||76.7||7||8||$1,756||$14,713||37.5|
|Rank||City||Average Credit Score||Eviction Rate (per 100)||Cost of Living||Unemployment Rate (%)||State Max Interest Rate (%)||Median Credit Card Debt||School Spend Per Student||Final Score|
|9||Temple Hills, MD||610||7.32||125.7||4.3||6||$2,277||$16,054||27.2|
|11||District Heights, MD||586||2.19||87.4||5.5||12||$2,388||$9,764||27.6|
|14||Stone Mountain, GA||614||11.33||103.3||3.9||7||$2,216||$9,451||28.7|
|18||East Orange, NJ||564||0.03||126||6.7||6||$1,894||$26,578||29.3|
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