Cities with 10 highest credit scores found in just 4 states

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If your credit score could use a boost, consider moving to Minnesota or one of its neighboring states.

The three U.S. cities with the highest average VantageScore in the nation are all in Minnesota, according to Experian's latest annual State of Credit report, which the credit reporting bureau released Wednesday.

Additionally, the 10 cities with the highest average score are all located in Minnesota, Wisconsin or the Dakotas.

The country as a whole is also doing well, though.

The national average credit score increased four points to reach 673 this year. That's only six points shy of the national average reached in 2007, the year before the recession started.

The credit scores of almost every metropolitan area also increased this year.

RELATED: If you're trying to improve your credit, avoid making these 10 purchases on your credit card:

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10 purchases you shouldn't make with a credit card
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10 purchases you shouldn't make with a credit card

#1: Household bills

If you are already cutting it close for the month, you may be tempted to use plastic to pay the utility, cellphone or cable bill. But if you’re not paying off your full balance each month, the interest you will be charged makes those monthly bills even more expensive.

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#2: Cars 

Car dealers often don’t allow credit card purchases, or may limit the amount of the purchase price you can put on your card. Dealers don’t like credit card payments because they have to pay the 1 to 3 percent fee the card company charges to process the transaction.

You could exercise the cash-advance option. But you’ll pay a fee and a higher interest rate. Also, you won’t get a grace period on the interest — it will begin to accumulate right away.

Instead of using a card, go to a credit union or bank to get financing approved at a reasonable interest rate before shopping for a car.

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#3: Student loans

If you can’t afford to pay your federal student loans, you have options. They include an income-based repayment plan, deferment, forbearance and possibly loan forgiveness. Take a look at “How to Get Free Help With Your Student Loans” to learn more.

Paying your student loan debt with a credit card increases the amount of interest you’re paying on the debt. Even if you have a zero-percent introductory credit card offer, it will expire in time.

And while the federal government will accept a credit card payment for loans in default, many student loan servicers won’t allow this form of payment.

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#4: Retail therapy

Think a new purchase will cheer you up? Perhaps. But remember that cash is king if you choose this mode of “therapy.” Use cash, and you won’t let your credit card balance spiral out of control.

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#5: Medical bills

If you use a medical credit card available through your health care provider’s office to pay bills, be careful to read the fine print about your obligations.

Also consider steps you can take to reduce health care costs. See “10 Ways to Fight High Medical Bills.”

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#6: A night on the town

Handing your credit card to an unscrupulous waitperson equipped with a skimming device isn’t your only worry. If you’re out on the town throwing back drinks, it’s easy to run up a tab you can’t afford.

So when painting the town, it’s best to pay with cash.

Photo credit: Getty

#7: Big-ticket items you can’t pay off immediately

Credit cards offer great purchase protections and should be used for many big-ticket purchases. But buying something on credit when you can’t afford to pay it off right away isn’t smart.

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#8: Credit card payments

You can’t charge your monthly credit card payment on another credit card. But perhaps you’ve been tempted to use a cash advance from a credit card to bolster your checking account so that you can pay other bills.

We’ve already explained the folly of cash advances. Your credit card is not an ATM and should not be used as one.

There are real benefits, however, to transferring high-interest credit card debt to a new card with a generous zero-percent balance transfer offer. Just be aware of the balance-transfer fee and find out how long the offer lasts.

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#9: ‘Sale’ items

Convinced that you might miss out on savings if you don’t purchase a specific item on sale right away? That’s one of the warning signs of an impulse buy.

Wait a day and think about whether you really need the item. Nine times out of 10, the answer will be “no.”

You aren’t saving money by spending it for something you don’t need.

Photo credit: Getty

#10: Unsecured online purchases

When shopping online, make sure the web address has “https” at the beginning. If it doesn’t, that’s your cue to take your online shopping elsewhere.

In fact, do your homework before purchasing anything online to make sure a company is reputable and not the source of many consumer complaints.

Which purchases do you refrain from making with your credit card? Let us know in the comments below or on our Facebook page.

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Experian considers these increases a sign of continued economic rebounding. The bureau's vice president of analytics and new business development, Michele Raneri, explains:

"We are seeing the positive effects of economic recovery, with the rise in income and low unemployment reflected in how Americans are managing their credit. All credit indicators suggest consumers are not as 'credit stressed.' Credit card balances and average debt are up, while utilization rates remained consistent at 30 percent."

Experian's State of Credit report, now in its seventh year, uses VantageScore data. Along with the FICO score, VantageScore is one of the main consumer credit-scoring models. The VantageScore range is from 300 to 850.

Other findings from the latest report include the following national averages:

  • Number of credit cards: 2.35 per consumer
  • Average debt: $39,216 per consumer
  • Number of retail credit cards: 1.51 per consumer
  • Average retail debt: $1,081

The 10 cities with the highest credit scores are:

  • Mankato, Minnesota: Average VantageScore of 708
  • Rochester, Minnesota: 708
  • Minneapolis, Minnesota: 707
  • Green Bay, Wisconsin: 704
  • Wausau, Wisconsin: 704
  • Duluth, Minnesota: 703
  • Sioux Falls, South Dakota: 703
  • La Crosse, Wisconsin: 703
  • Fargo, North Dakota: 703
  • Madison, Wisconsin: 702

The 10 cities with the lowest scores are:

  • Shreveport, Louisiana: Average VantageScore of 640
  • Corpus Christi, Texas: 639
  • Bakersfield, California: 639
  • Alexandria, Louisiana: 639
  • Monroe, Louisiana: 639
  • Laredo, Texas: 635
  • Riverside, California: 632
  • Harlingen, Texas: 631
  • Albany, Georgia: 624
  • Greenwood, Mississippi: 622

If credit card debt is weighing down your credit score or you need help with credit restoration, be sure to visit the Money Talks News Solutions Center. You'll also find help dealing with credit collectors and finding a new or better credit card.

What do you make of America's rising VantageScore numbers? Share your thoughts below or over on our Facebook page.

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