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Where you live can make a big difference in how you use -- or misuse -- credit, but it's more complicated than just your address.

When credit bureau Experian released its third annual State of Credit report in August 2012, listing average credit scores for municipalities all over the United States, it revealed that eight of the 10 cities with the highest average credit scores were in the Midwest, while all 10 cities with the lowest average scores were in the South.

Local economic conditions are a big part of the explanation, with the top 10 cities boasting some of the nation's lowest unemployment rates, while the bottom 10 are suffering with some of its highest. No mystery there: When people can't find jobs, they often can't pay their bills.

But local job markets tell only part of the story, as a closer comparison of unemployment figures and credit scores proves. For instance, Hartford, Conn., with 8.5 percent unemployment has an average Experian VantageScore of 771 -- 21 points above the national average of 750. Jacksonville, Fla., has the same 8.5 percent unemployment rate, but its average credit score is 729 -- below the national average by an equal 21 points.

"It's a whole combination of factors," says Rod Griffin, director of public education at Experian. "You're comparing apples and oranges and pears, with an avocado thrown in for the West. The survey did not go into the socioeconomic or psychological behavior of the individual."

Here's a look at how your location can affect your lifestyle and change how you use credit, thus impacting your credit score:

The 'flashiness' penalty

Call it the "keeping up with the Joneses" effect. If you live in an area where your image may count more than your reputation, your spending may outpace your ability to keep your bills manageable, say experts.

"Our offices are in Fort Lauderdale. It's a very flashy town," says Howard Dvorkin, founder of Consolidated Credit Counseling Services. "If you're driving around in your Honda Civic, and everyone else is driving around in Mercedes and BMWs, your self-worth is affected, though it can't be quantified mathematically." Thus, the need to live up to local standards of opulence can drive people to overspend and get into trouble with excess debt.

The pressure is greater, he adds, in urban areas. "You're more observable in a high-density population. So much of your behavior is apparent to others, you're much more driven to manage the impression you make. It's why people in cities look better and why they dress better. You can hide your credit score, but you will still display your Armani jacket."

Fashionistas have to spend more and thus are likelier to use more credit, says Elaine Notarantonio, professor of marketing at Bryant University in Smithfield, R.I.

The need to keep up with a flashy population can easily get out of hand, however. "When I lived in Los Angeles, I was standing in line at a credit union. I could overhear the conversation ahead of me," says Thomas O'Guinn, professor of marketing at the University of Wisconsin-Madison and an expert on the sociology of consumption. "A man was clearly borrowing quite a bit of money." The loan officer was reluctant, but eventually agreed to the loan. "Given all the angst, I was convinced it was for a house," O'Guinn says. "But it turned out to be for a Mercedes."

The 'housing hangover' effect

You felt like you were rich when your house ballooned in value, and you lived like it. Now it's no longer worth what you paid for it, but you still live high on the hog, and your credit suffers as a result.

And instead of owning up to your growing debt, you may find yourself abdicating fiscal responsibility. For example, a shift in attitude can occur when large numbers of homeowners find themselves living in money pits. In communities with many underwater houses, some homeowners have chosen to "strategically default," meaning they decided to stop making payments on their mortgages even though they could still afford it.

"If you live in an area like Southern California where there's a depressed real estate market, and foreclosures and strategic defaults are happening, people are no longer shameful about having done it," says O'Guinn. "If you live in an area where that becomes common, then it seems OK to do. Do people take it lightly? No. But it becomes normalized."

People are very powerfully affected by their neighbors' behavior, says Notarantonio. "One study I read showed that people's energy-saving behavior is greatly increased if they know that others in their neighborhood are doing more to save energy. That led an energy company to send its customers reports showing how their power consumption compared to the neighborhood average."

In the freewheeling atmosphere of Las Vegas, for example, big spenders who thought the good times would never end were hit especially hard when the housing bubble burst, according to Las Vegas Sun columnist J. Patrick Coolican. During the good times, he says, there was plenty of work to be had at good wages, and construction was strong with plenty of overtime available. "Then you throw in the rapid rise in home prices and that accelerated the wealth effect. People believed they were richer and they were more free-spending. Those things together led to some irresponsible financial habits -- I don't think there's any question about that. That's why when the crash came, we really crashed hard."

In turn, some Las Vegans are taking this social acceptability of default one step further by holding lenders accountable for faulty or fraudulent foreclosures. "We passed legislation that created criminal penalties for a bank mistakenly or fraudulently taking someone's home," Coolican says. "So banks have become very reluctant to foreclose." As a result, the Experian study notes, foreclosures in Las Vegas have dropped about 163 percent from 2011. Thanks to that reduction, the city has an average credit score of 714, and beat out Savannah, Ga., by one point, lifting itself out of the bottom 10 for 2012.

But the reprieve may not last, Coolican warns. Eventually, he believes, the state legislature may change the law to make fraudulent foreclosures a civil rather than criminal matter. If that happens, the number of foreclosures in Vegas may climb again. "It's left a lot of people strategically squatting in defaulted homes," in the meantime, he says.

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