Study: Highest credit scores belong to Democratic congressional districts

A new analysis of Credit Karma data finds that people living in Democratic congressional districts tend to make more money and have higher credit scores on average than those living in Republican congressional districts.

But people in Democratic districts also carry more debt.

The analysis, conducted with TransUnion credit report data from the last five months, looked at the 10 congressional districts with the highest average credit scores in the nation as measured by credit-scoring model VantageScore 3.0 and found that nine of the 10 highest-scoring districts are represented by Democratic lawmakers. VantageScore® 3.0 credit scores range from 300 to 850. (Learn more about our methodology.)  

Key findings

We started by looking at the top 10 highest-scoring congressional districts overall to see if we could spot any trends. Here’s what we found:

Key findings for the 10 highest-scoring congressional districts overall

We then expanded the scope of our analysis to compare the 10 highest-scoring Republican congressional districts with the 10 highest-scoring Democratic congressional districts. Here’s what we found:

Key findings for the top 10 Republican districts vs. top 10 Democratic districts

Where exactly are the 10 highest-scoring congressional districts located?

Rep. Nancy Pelosi, D-Calif., represents California’s 12th Congressional District, which encompasses the city of San Francisco and boasts the highest average VantageScore 3.0 credit score in the country: 704.

In fact, the top four congressional districts with the highest average credit scores are all located in and around California’s Bay Area. Most of the others are on the East Coast. Take a look at the table below for the full list.

Why do people in Democratic districts have higher credit scores than those in Republican districts?

Credit scores are influenced by a number of factors, including payment history, the amount you owe, the length of credit history, the kind of borrowing you do and how recently you applied for new credit.

When we looked at the average credit scores of the 10 highest-scoring Democratic congressional districts and the top 10 Republican congressional districts, those in Democrat-leaning districts had credit scores 21 points higher on average than those living in Republican-led districts.

We took a look at a few factors to help determine why the top 10 Democratic districts might be scoring higher. Here’s what we found:

• People in the Democratic-held districts carry more “good debt.” The kind of borrowing you do is important. Although people living in the highest-scoring Democratic congressional districts owe an average of 3.4% more than people in Republican-led districts do, more of their money is tied up in installment loans like mortgages. That’s considered “good debt” by many experts. By comparison, people in Republican-held districts owe about 5% more on revolving lines of credit like credit cards, which is considered “bad debt.”
• People in the Democratic-led districts pay their bills more promptly. People living in the highest-scoring Democratic districts are ever-so-slightly more likely to pay their bills on time. Since payment history makes up the biggest chunk (about 40%) of your VantageScore® 3.0 credit score, even a small difference between Democratic districts (98.47%) and Republican districts (97.88%) can affect the overall average scores.
• People in the Republican-held districts have more hard inquiries. People living in the highest-scoring Republican congressional districts have nearly 20% more hard inquiries than those living in the highest-scoring Democratic districts. This shows that those in the Republican-held districts apply for new credit more often. Although this is only a small factor on your credit scores, it can have an effect.
• People in the Democratic-leaning districts have higher incomes. People living in the 10 highest-scoring Democratic congressional districts make about $11,540 more annually on average than those in the highest-scoring Republican districts. Typically, the more money you make, the more credit banks will extend to you — and that checks out in our analysis: People living in the Democratic-held districts have about $5,718 more in available credit on their credit cards than those living in the Republican districts. It’s also important to note that having access to credit that you don’t use helps you maintain a lower credit utilization ratio. Maintaining a high utilization ratio can hurt your credit scores.

What kind of debt weighs most on people in Democratic vs. Republican districts?

Debt in Democratic congressional districts

Of those who have a mortgage, people living in the top 10 Democratic districts owe about $130,000 more (41% on a percentage basis) than people living in the top Republican districts.

Again, this is probably because it’s more expensive to live on the coasts. So people living in these regions of the country need to borrow more money to buy a home.

Similarly, people with student debt living in Democratic districts owe $3,413 (9%) more in student loans on average. We figure that’s at least in part because new grads with fresh student loan debt are more likely to live in big cities along the coast.

Debt in Republican congressional districts

People living in the 10 highest-scoring Republican congressional districts owe an average of $360 (5%) more in credit card debt than those in Democratic-held districts.

And those in Republican-leaning congressional districts tend to spend a little more money on their cars. People with auto loans living in these Republican districts owe an average of $572 (3%) more in auto loans than those in Democratic-held congressional districts.

Bottom line

The gap in average credit score between Republican and Democratic congressional districts is surprising but not unexplainable. The data show a few clear reasons that people in Democratic-held districts have higher credit scores, including carrying more “good debt,” paying their bills more promptly, earning higher incomes and having fewer hard inquiries on their credit report. Location might also play a key part. Because people living on the costs can face higher costs of living, they generally need to make more to survive, which can have an indirect impact on credit health.

Methodology

To conduct this analysis, Credit Karma took a look at the most recent TransUnion credit report for any member who had logged onto Credit Karma in the five months leading up to Oct. 19, 2018, totaling about 45 million members. We then used aggregated ZIP code data from these credit reports to match groups of users to specific congressional districts across the country. Once we had sorted these groups into their respective congressional districts, we could then use the remaining information in their credit reports to calculate the average values for all the data points listed in the article — including VantageScore 3.0 credit score, on-time payments, total debt and type of debt — then aggregate the data by various cuts: congressional district and current party control. Credit reports do not contain information about income, so we used 2017 median income data estimates from the U.S. Census Bureau, which may not represent a true median for the users in our population. All percentages and figures in this article have been rounded to the nearest whole.