America’s average credit card rating goes subprime: Residents at tech hubs high in credit rating, says study

A new report from free credit score site, Credit Sesame, has said America’s credit rating is falling. But it hailed the credit card elite for its high rating and living in the few hubs around the tech industry.

It noted that neighbourhoods on the West Coast are packed with residents having the best credit record, with zip codes covering the addresses of Microsoft, Yahoo!, and Google.

However, the study revealed that average credit score for all US states put together is a lowly 604, which is subprime for many banks, noted Stew Langille, Credit Sesame’s chief strategy officer, reports Bloomberg.

Massachusetts glory

Among the states, the study assigned highest credit scores to Massachusetts (636), Hawaii (632), Washington State (628) and New York State (628). At the bottom are southern states including Mississippi (572), Arkansas (577), West Virginia (580), Alabama and Kentucky (582).

California is ahead with top five credit scores. It noted that credit scores were evolved on the basis of how credit is managed. Credit Sesame, in its survey tried to show a strong correlation with income and credit rating.

Silicon Valley

There was better credit rating for the highly educated citizens of Silicon Valley, who are very credit savvy.

“Potentially part of the problem is that if you don't have a high level of education, and you're busy working and managing your life, it's hard to know what to do to get the optimal credit score,” noted Langille.

However, the highest credit score 850 has not been scored by ay state. Those closer to it are in zip codes of Seattle with an average score of 719. So are parts of Mountain View, California (748) Sunnyvale (730) and San Francisco (707).

The report also mentioned the most creditworthy neighborhood in New York as Gramercy Park with an average credit score of 720. It is followed by Brooklyn Heights at 716.

On credit usage, the study had a grading of 2.5 million users on a scale of A to F with those using the smallest percentage assigned the top scores. Less than 19 percent of Americans got an A, which is given to those who use zero to 10 percent of available credit limit. Nearly 57 percent of Americans with an F use 70 percent or more of available credit.

Trendy travel cards

Meanwhile, travel credit cards are becoming trendy with the opportunity to earn more free points that are redeemable for airfares, hotels or hard cash. A blog analysed how credit card companies partner with various travel brands for enticing consumers to sign up for bonuses, loyalty points, special discounts etc. As a result, consumers are in a bonanza of free air tickets, hotel rooms, vacations, and even cash back.