The Biggest Little City in the World is also the most in-debt city in America.
Reno, Nev., holds the distinct of having the highest average debt load per person, with the average resident holding $27,320 in non-mortgage debt.
That’s according to Experian, which released its annual State of Credit report last week. The report, which ranks the major U.S. cities by their credit scores, also tracks such statistics as average late payments per year and average debt load per person. And in that latter category, Reno edges out Columbus, Ga. and Baltimore, Md. for the top spot. The national average debt load is $24,890.
Interestingly, average debt load doesn’t correlate much with credit score. Reno’s average credit score is only slightly below average, for instance — 740, compared with the national average of 750. And Seattle, which has the seventh highest debt load, has an excellent 776 score. On the other end of the spectrum, the city with the lowest average debt is La Crosse, Wisc., which also boasts a top-10 credit score. Still, the runner-up is Palm Springs, Calif., which has a below-average credit score of 742.
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“The amount of debt you carry in terms of balance to limit ratios is a major factor in credit scores, but you can still have high amounts of debt and still have good credit scores,” explains Rod Griffin, Experian’s Director of Education. “You can carry fairly high debt if you manage your payments well.”
Managing payments well means making sure you never make a late payment, which is the biggest factor in your credit score. That’s why average credit scores correlate much more strongly with late payments per year than they do with average debt load.
But it also means managing that credit-to-limit ratio (also known as the utilization rate), which Griffin says accounts for around 30% of your credit score. So even if you’re carrying a lot of debt like the average Reno or Seattle resident, you can still keep that credit score high by spreading it among multiple credit cards and making sure that none of your cards has a balance approaching its limit.
“Keep your balances as low as possible,” says Griffin. “The ideal situation is to pay your balance in full every month.”
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The Highest Average Debt Load
Reno, Nevada: $27,320
Columbus, Georgia: $27,309
Baltimore, Maryland: $27,030
Waco, Texas: $27,007
Little Rock, Arkansas: $26,915
Denver, Colorado: $26,775
Seattle, Wash.: $26,722
Dallas, Texas: $26,661
Washington, D.C.: $26,555
Jackson, Miss.: $26,414
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Image: sjsharktank, via Flickr