The 'We're Midwesterners; we don't do debt' mindset

Conversely, if you live in an area where you'd have to walk the hall of shame if word got out that debt collectors were on your tail, you'd forsake those annual winter cruises for years to pay back what you owe in order to avoid the judgment of your peers.

Eight of the 10 cities with the highest average credit scores are in the Midwest -- and that's no accident, experts say. While the Midwest generally has a higher employment rate and a more stable housing market than much of the rest of the country, "in the Midwest, it's clearly about attitudes," says Alan Schiffres, partner at Novantas, a nonprofit credit counseling service. "You're dealing with more conservative attitudes toward debt."

"If somebody had a foreclosure around here, it would be big news and very shameful," O'Guinn says. "I don't think you'd pick that up in some other communities."

"We think of communities as having certain norms," Griffin of Experian says. He recalls encountering a couple from Kansas who had amassed more than $100,000 in debt. Instead of declaring bankruptcy as many people might have done in that situation, they worked hard and were very frugal and managed to pay it off within five years. "You tend to think that has something to do with the social setting, though I can't say for sure that's the case," Griffin says.

Either way, it's clear that folks in the Midwest on average handle their money more wisely than those in the rest of the country. "It's interesting that the Midwest has consistently done well in this study," Griffin says. "For whatever reason, they pay their bills on time consistently, keep their debts low and live within their means."

The 'We're too smart to be in debt' curve

It's a given: The more educated you are about how to best manage credit and debt, the more you're able to avoid common financial missteps.

"In regions where people tend to have lower levels of education and lower incomes, credit scores are lower," says Karen Carlson, director of education and creative programs at InCharge Education Foundation, a credit counseling and education service. "Lower levels of education correlate with higher unemployment, which is one of the main contributors to missed payments and debt accumulation. There is also evidence to show financial literacy correlates with education levels. Those with higher levels of financial knowledge are less likely to engage in high interest debt such as payday loans or subprime mortgages."

And this is why education, especially education about how to manage one's finances and use credit wisely, is the best defense for those in communities where over-borrowing is the norm. "We need to get financial literacy education in the hands and heads of people who could most benefit from it," Carlson says.

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