Credit scores improving nationwide

In what is good news for prospective first-time home buyers across the country, even in those areas that have been hit hardest by the recession, credit scores are on the rise.

The third annual State of Credit report from Experian showed consumers in Las Vegas, Phoenix and Bakersfield, California, which were three of the hardest hit cities involved in The Great Recession, have shown improvements in their credit scores.

Among the questions the State of Credit report set out to answer include how the struggling economy has led to many consumers reducing their spending, and whether or not that had a lasting effect on their credit scores over the past few years.

"Increasing numbers of Americans are showing they understand how credit works," said Maxine Sweet, Experian vice president of public education. "They're paying their bills on time and lowering their debt-to-limit ratio. It's encouraging to see them demonstrating that they have the resources to make those positive changes in how they manage credit. They are choosing to 'Live Credit Smart'."

On a regional basis, the South had seven out of 10 cities improving their consumer credit scores, but it was the Midwest that led the way in terms of top 10 rankings. Looking closer, consumers in Wisconsin showed strong credit health as four of the state's metro areas made the top 10 list for the second straight year.

"The 2012 State of Credit confirms another year of incremental gains on the part of consumers, yet with a national average score of 750, which is just that - average - we have room to improve," said Gail Cunningham, vice president of membership and public relations at the National Foundation for Credit Counseling, the nation's largest financial counseling organization. "Widespread financial education is the key to helping more Americans manage their credit well as they regain their economic footing."

Having a strong credit score as a number of positive advantages, one of which is the ability to secure a mortgage for that first home. Major banks and other lenders are more inclined to offer a low-rate mortgage to a home buyer with an impressive credit score. That is why individuals with strong credit are encouraged to plunge into the waters of home buying and take advantage of all the benefits that it offers.

The Federal Savings Bank