The cities with the best money management skills, according to WalletHub
Residents in these cities have high credit scores, low income-to-debt ratios, and rarely make late payments, a WalletHub study found
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Managing your money isn’t easy, especially as inflation and out-of-control cost of living seems to eat away at your paycheck more each year. But some cities excel at it while the rest of the country is floundering.
WalletHub set out to find the cities that are best at managing their money, looking at a slew of factors like average credit-card debt-to-income ratios, the median credit score, how often residents are making late payments, and the foreclosure rate, among others.
“Our study found that in the cities where people are best at money management, residents have significantly higher credit scores than average, well into the excellent credit range,” said WalletHub analyst Chip Lupo. “This is due to a combination of low debt-to-income ratios, restrained credit utilization, and low rates of late payments and delinquency.”
Continue reading to see which cities made the top of the list and why.
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#7: Mountain View, California
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Rounding out the top seven, Mountain View — home to Google $GOOGL’s headquarters — maintains a 99th percentile ranking for its financial habits. The city has a median credit score of 768 and a low credit-card debt-to-income ratio of 1.8%. Residents also manage a student-loan debt-to-income ratio of 14.7% and average 1.1 late payments.
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#6: Redmond, Washington
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Redmond, where Microsoft $MSFT is headquartered, takes the sixth spot with a median credit score of 770. The city’s residents maintain a credit-card debt-to-income ratio of 2.2% and a mortgage debt-to-income ratio of 332.6%. For other financial obligations, the city has a car-loan debt-to-income ratio of 12.8% and an average of 0.9 late payments.
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#5: Palo Alto, California
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Palo Alto, the heart of Silicon Valley, ranks fifth. Residents there have a median credit score of 773 and the city’s mortgage debt-to-income ratio is 422.3%, which is balanced by a disciplined credit-card debt-to-income ratio of 2.3%.
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#4: Scarsdale, New York
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Scarsdale, an affluent New York City suburb, holds the fourth position and stands out for having the lowest mortgage debt-to-income ratio on this list at 219%. The city’s residents maintain a median credit score of 775. Furthermore, Scarsdale has a student-loan debt-to-income ratio of 10.1% and a car-loan debt-to-income ratio of 8%.
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#3: Lexington, Massachusetts
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Lexington, a Boston suburb, is ranked third overall and features a 99th percentile rank for financial management. The city has a median credit score of 783 and a mortgage debt-to-income ratio of 292.3%. Residents manage their student-loan debt-to-income ratio at 14.2% and make very few late payments.
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#2: Los Altos, California
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Coming in at second place, Los Altos, also in Silicon Valley, boasts the highest median credit score of the top seven cities at 785. The city is particularly notable for its low rate of missed payments, averaging only 0.4 late payments per person. Additionally, residents maintain a car-loan debt-to-income ratio of 8.9%.
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#1: Cupertino, California
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Cupertino, home to Apple $AAPL’s headquarters, ranks as the number one city for money management in the United States, according to WalletHub. Residents here maintain a median credit score of 778 and a credit-card debt-to-income ratio of only 1.5%. The city also demonstrates strong payment reliability with an average of just 0.7 late payments.