Credit Score Articles

Culture of Spending Varies by City

Have you always dreamed about living in a penthouse overlooking New York City or relaxing in a loft in San Francisco? If so, make sure you have the income to support your living habits.

A new study reveals that residents who live in certain cities carry more debt than others. This is largely due to the cost of living, property values, rental prices and even the culture of spending, according to U.S. News and World Report. On average, citizens living in Denver, Colorado carry the most debt - upwards of $26,636. Seattle and Dallas came in second and third.

Money comparison website Bundle.com found that a consumer's spending habits vary largely by location. Americans living in West Virginia, for example, spend an average of $100 per month on clothing and $30 on hobbies, while individuals living in Connecticut generally spend $200 on clothes and $100 on hobbies each month.

Living in an expensive area doesn't mean you have to spend excessively. Further, living beyond your means will force you to rely on credit and lead to credit score damage if you can't keep up with your bills. Engage in smart money management habits that allow you to keep your credit score healthy and build your savings.

Know your credit score. Maintain and boost your rating by paying your bills on time and managing your credit wisely. Do not apply for more credit than you need - carrying too many credit, gas and retail cards can make you appear risky to lenders.

Stick to a budget. Put a certain amount of your paycheck in savings each pay period and forget about it. Calculate how much you will need to pay your bills. Set aside money for entertainment, food and gas. Don't forget to put money into an emergency fund. Many people inadvertently cause damage to their credit score by failing to prepare for the unexpected and being forced to take out loans they can't afford.

Keep your credit card balances low. Maxing out your credit cards will damage your credit score, even if you pay off your balances in full each month. Keep your credit utilization rate below 30 percent to avoid shaving points off your credit score.