CHARLOTTE, N.C., Feb. 4,
2016 /PRNewswire/ -- San
Francisco-area residents have the highest credit scores of
any metro area in the US, increasing their eligibility for the best
rates on mortgages and other types of loans.
That's one of the findings of a new analysis of credit scores
and loan offer information from LendingTree®, the nation's leading
online loan marketplace. The company examined over four million
loan requests made through LendingTree.com in 2015 to calculate
average credit scores by metro areas, and to correlate credit
scores with loan offer interest.
Western and Northeastern metros dominate the top spots on the
credit score rankings, accounting for ten of the top twenty
areas. Metros in Southern states account for virtually all of
the twenty lowest-ranking cities.
Credit scores represent people's creditworthiness for loans
through a calculation of several different factors, including the
amount an individual currently owes to lenders and his or her
credit history. Most credit score models range from a low of
300 to a high of 850, with those above 720 usually considered
excellent loan candidates and those below 500 generally classified
as poor candidates. The average score in this study is 643.
"Because credit scores are so closely tied to interest rates
offered to borrowers, a credit score difference of even 50 points
can mean substantial financial savings for large financial
transactions like buying a home, financing a car or consolidating
debt," said Doug Lebda, founder and
CEO of LendingTree. "Knowing and managing your credit score is
especially important in this volatile interest rate
environment."
People living around San
Francisco and San Jose
boast an average score of approximately 673, besting Bridgeport, CT and Boston, both about 664, Oxnard/Thousand
Oaks, CA at roughly 663 and Denver and Washington, DC, each around 662.
With an average credit score of 620, Jackson, MS takes the list's bottom spot.
Credit and loans
In 2015, borrowers with a credit score of 720 and higher were
offered APRs averaging 4.15% for a 30-year fixed rate purchase
mortgage. For a $200,000 loan, the
monthly payment would be roughly $963
per month.
However, borrowers with a credit score between 620 and 639 were
offered APRs averaging 4.93%. For the same loan, the borrower with
the lower credit score would pay about $1,052 per month, a difference of roughly
$89 per month, $1,068 per year or over $32,000 over the life of the loan.
"If you are planning a major purchase in the next year or two,
there are several steps you can take now that will help to improve
your credit score in the future," said Lebda. "Reducing
balances on credit cards is a good place to start. Second,
always be diligent about paying your bills on time and find ways to
remind yourself of when a payment is due. Third, be sure to
review details in your credit report and alert the major credit
agencies to any errors. With MyLendingTree, we provide a free
monthly credit score and score analysis to help consumers easily
monitor and manage their credit score. We also analyze interest
rates offered on our network and, based on your credit profile and
existing loan details, will let you know if you could be
overpaying, by how much, and what you can do to save money on your
loan payments."
TOP 10 METRO AREAS
BY CREDIT SCORE
|
|
Region
|
Metro
Area
|
Avg Credit
Score
|
Rank
|
West
|
San
Francisco-Oakland-Fremont Ca
|
673
|
1
|
West
|
San
Jose-Sunnyvale-Santa Clara Ca
|
673
|
2
|
NE
|
Bridgeport-Stamford-Norwalk Ct
|
664
|
3
|
NE
|
Boston-Cambridge-Quincy Ma-Nh
|
664
|
4
|
West
|
Oxnard-Thousand
Oaks-Ventura Ca
|
663
|
5
|
West
|
Denver-Aurora
Co
|
662
|
6
|
SO
|
Washington-Arlington-Alexandria
Dc-Va-Md-Wv
|
662
|
7
|
MW
|
Minneapolis-St.
Paul-Bloomington Mn-Wi
|
661
|
8
|
West
|
Portland-Vancouver-Hillsboro Or-Wa
|
659
|
9
|
West
|
Seattle-Tacoma-Bellevue Wa
|
657
|
10
|
|
BOTTOM 10 METRO
AREAS BY CREDIT SCORE
|
|
Region
|
Metro
Area
|
Avg Credit
Score
|
Rank
|
SO
|
Little Rock-North
Little Rock-Conway Ar
|
629
|
91
|
SO
|
Columbia
Sc
|
629
|
92
|
SO
|
El Paso Tx
|
628
|
93
|
SO
|
Birmingham-Hoover
Al
|
627
|
94
|
MW
|
Youngstown-Warren-Boardman Oh-Pa
|
626
|
95
|
SO
|
Memphis
Tn-Ms-Ar
|
625
|
96
|
SO
|
Killeen-Temple-Fort
Hood Tx
|
624
|
97
|
SO
|
Mcallen-Edinburg-Mission Tx
|
624
|
98
|
SO
|
Fayetteville
Nc
|
624
|
99
|
SO
|
Jackson Ms
|
620
|
100
|
30yr Fixed Rate
Purchase Mortgage
2015
|
Credit
Score
|
Avg. Offered Interest
Rate
|
720+
|
4.15
|
680-719
|
4.36
|
660-679
|
4.64
|
640-659
|
4.79
|
620-639
|
4.93
|
580-619
|
4.68
|
METHODOLOGY: The study is based on data from more than
four million loan requests submitted through LendingTree in 2015
including refinance, purchase, home equity, and personal loans
(excluding auto, business, student & credit card.) The
data ranks the top 100 metro areas based on average credit scores
and examines how credit scores significantly impact interest rates
and monthly payments. Credit scores are rounded to the nearest
whole number; if two metros are listed sequentially with the same
score, it means the higher-ranked metro actually has a higher
average score if decimal point numbers were included.
Credit Score Breakdown
Credit scores for consumers who receive at least one loan offer
are slightly higher on average when compared to all loan
shoppers:
Credit
Score
|
Percent of All
Loan
Shoppers in 2015
|
|
Loan
Program
|
Avg Credit Score
of
Borrowers w/Offer
|
760+
|
8.0%
|
|
30-yr Fixed
Purchase
|
713
|
720-759
|
11.3%
|
|
30-yr Fixed
Refinance
|
722
|
680-719
|
16.0%
|
|
3-yr Personal
Loan
|
690
|
640-679
|
18.3%
|
|
|
600-639
|
17.2%
|
|
|
560-599
|
15.0%
|
|
|
Below 560
|
14.1%
|
|
|
To view the original release please visit LendingTree's Press
Room:
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online loan
marketplace, empowering consumers as they comparison-shop across a
full suite of loan and credit-based offerings. LendingTree
provides an online marketplace which connects consumers with
multiple lenders that compete for their business, as well as an
array of online tools and information to help consumers find the
best loan. Since inception, LendingTree has facilitated more than
55 million loan requests. LendingTree provides free monthly credit
scores through My LendingTree and access to its network of over 350
lenders offering home loans, personal loans, credit cards, student
loans, personal loans, business loans, home equity loans/lines of
credit, auto loans and more. LendingTree, LLC is a subsidiary of
LendingTree, Inc. For more information go to www.lendingtree.com,
dial 800-555-TREE, like our Facebook page and/or follow us on
Twitter @LendingTree.
MEDIA CONTACT:
Megan Greuling
704-943-8208
Megan.Greuling@LendingTree.com
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SOURCE LendingTree