Give us some credit: Spokane ranks third in the nation for rising credit scores in 2019

Spokane residents may find it’s easier than ever to afford their dream home, buy a luxury vehicle or qualify for lower-interest rates for other purchases.

That’s because more than 53% of residents raised their credit scores in 2019, placing Spokane third out of 100 cities with the largest increase in scores nationwide, according to a recent report by LendingTree.

LendingTree reviewed credit reports of more than 225,000 My LendingTree users and compared their scores in the first quarter of 2019 with scores from the prior year. My LendingTree is a credit monitoring service with more than 9 million users.

In about half of the cities surveyed, LendingTree found most credit scores decreased or remained the same. However, in Spokane, about 16% of people saw their scores increase by 50 points and 3% experienced an increase of 100 points, according to LendingTree.

Spokane trailed Provo, Utah, and El Paso, Texas, which ranked first and second in the country for the greatest jump in residents’ credit scores, at 55% and 53%, respectively, according to the report.

The increase in credit scores may be attributed to a rapid rise in consumer financial protection as well as increased access to credit monitoring tools and apps, said Kali McFadden, senior research analyst with LendingTree.

“I think there’s a lot more information and education out there. People have a lot more access to their credit reports and, now, there are a million different apps out there that give you your credit score, among other things,” McFadden said. “People can look at (their credit score) every day of the week if they want to and can get more information on various things that affect it.”

Bankruptcies and foreclosures – which can affect credit for seven to 10 years – are dropping off reports since the Great Recession and reducing impact on credit scores, she added.

Based on LendingTree’s past regional and city studies, Spokane and Idaho tend to be “more fiscally prudent than other places,” McFadden said, adding this trend is also found in Utah and the northern Great Lakes states.

Spokane’s average credit score is 678, which falls in what’s considered the “good credit” range, according to LendingTree.

The average credit score nationwide is 701, according to credit scoring company FICO. Credit scores below 669 are typically classified as fair or subprime, meaning consumers may be considered a higher risk for lenders and receive higher interest rates on loans, according to Experian, a credit reporting agency.

About 23% of Spokane County residents had subprime credit in 2018, compared with 27% in 2013, according to data from the Federal Reserve Bank of New York and Equifax.

Since 2009, the western U.S. has experienced an “exceptionally long” expansion, which is a time period where economic growth remains unbroken, said Grant Forsyth, chief economist for Spokane-based utility Avista Corp.

“In the Pacific Northwest, we have done very well in terms of growth in this expansion,” he said. “The amount of subprime credit scores really started to fall in 2013 and 2014. That’s when our regional economy really started to improve after the Great Recession. It’s connected to employment and wage growth.”

Forsyth said there are other factors at work, too, when it comes to Spokane’s rising credit scores.

“We’ve had in-migration to the region and those are people that have asset wealth. Some of those people are moving to the region for good jobs,” he said. “That also is going to shift the share of people that have subprime credit ratings.”

In Boise, 52% of residents raised their credit scores, while 48% of Seattle residents saw improvement in scores over the past year, according to LendingTree.

STCU Education Outreach Officer Keith Appleton advises consumers to pay down revolving debt and make loan payments on time, because payment history has the greatest impact in the standard FICO model.

Appleton said credit is not only important to qualify for a mortgage, apartment rental or car loan, but auto insurance companies factor in scores when pricing premiums and more employers are evaluating scores of potential employees. However, Washington state limits the scenario in which employers can use credit reports when making employment decisions.

“We talk about credit scores quite a bit when we go into the community, and we direct people to be checking it,” he said, adding many financial institutions will pull credit reports throughout the year to spot errors for consumers.

LendingTree’s McFadden said managing credit can be intimidating and credit scores can be an “emotional thing” for many people who feel it speaks to their self-worth, but resources are now available that make improving it easier.

“Raising credit scores is something they can be proactive about and take control over and it will relieve a lot of anxiety for people,” she said.