Tags: Wausau | Top | Credit | Rating

USA Today: Wausau, Wis., Has Top Credit Rating of US Cities

Tuesday, 11 Oct 2011 08:54 AM

Wausau, Wis., has the highest average credit score of all cities in the U.S., while Harlingen, Texas, has the lowest, according to USA Today, citing Experian data.

High credit ratings go to cities that didn't borrow and spend too much during the credit and housing boom, Experian analysis finds.

Many cities, Midwestern ones especially, that were frugal during the boom not only have comparatively better ratings today but also, lower unemployment rates.
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"Areas of the country that didn't go crazy during the boom are probably still reaping the benefits in terms of their credit scores," says Gerri Detweiler, personal finance expert for Credit.com, USA Today adds.

Those who did party hard during the good times are paying the bill today.

Low-scoring cities like Las Vegas and Bakersfield suffer from high foreclosure rates.

Harlingen, the only city with an average credit score below 700, has an unemployment rate of nearly 13 percent, well above the 9.1 percent rate for the country as a whole.

"Right now, those are the biggest issues," says Michele Raneri, Experian's vice president of analytics.

The winner, Wausau, was included in the survey for the first time this year because it just became big enough to merit analysis, although that doesn't detract from its responsible financial behavior

"It's significant to have a new city come onto the list and be at the top," Raneri says.

"It really shows that people are moving into the area."

Scores ranged from 501 to 990.

The national average came to 749, down from 754 in 2007, just before the recession began, but up one point from 2010.

State and city finances have come under the microscope lately, especially in wake of star Wall Street analyst Meredith Whitney's prediction of large-scale defaults at the municipal level.

Whitney made that forecast in December of 2010, although some investors see value in municipal debt, even bonds downgraded by ratings agencies.

Many cities and towns are cutting costs and raising revenue to stay solvent, and once they recover, their bond prices will rise, making purchases today a good buy.

"Often, there’s action taken to mitigate the situation," John Dillon, chief municipal-bond strategist at Morgan Stanley Smith Barney in Purchase, New York, tells Bloomberg.

"Usually management snaps to attention."

Opportunities are out there.

"The outlook is tainted by what they see in the rear-view mirror," says Lyle Fitterer, who helps oversee $26 billion of municipal bonds for Wells Capital in Menomonee Falls, Wisconsin, Bloomberg adds.

"Unless you're forecasting a double dip in the U.S. economy, you may see some improvement in these credits on an ongoing basis."

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Wausau, Wis., has the highest average credit score of all cities in the U.S., while Harlingen, Texas, has the lowest, according to USA Today, citing Experian data. High credit ratings go to cities that didn't borrow and spend too much during the credit and housing boom,...
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Tuesday, 11 Oct 2011 08:54 AM
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