Between April 2015 and April 2016, rent prices increased by 2.8% nationwide and according to Zillow, the median monthly rent price comes in at a cool $1,403. As long as rental housing remains in high demand, your credit score might make or break your ability to land a place.
When you have a lower credit score, finding homes and apartments with no credit check can be difficult. It’s possible, but you’ll need to do your homework. If you want to raise your credit score, moving to a city that’s friendly to renters can make your job easier.
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So, how does your choice of city make a difference to your credit? A city with a low cost of living and low rent prices can leave you with more cash in your pocket that you can use to pay down your credit card or student loan balances (and improve your credit in the process). You’ll have an easier time paying all of your other bills, too, when you’re not struggling to keep up with housing costs.
Timely payments and low debt balances make up a combined 65% of your FICO credit score calculation so your choice of location could have a huge impact on your score.
Consider this: the number 4 city on our list, Cincinnati, has a median rent price of $653. Compare that with San Francisco’s median rent price of $3,770 and you’ll understand why we encourage you to look at renter-friendly cities if moving is an option for you.
Here are 10 cities that Credit Sesame recommends if you’re a renter who’s hoping to achieve a better credit rating.
1. El Paso, TX
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– Median rent price: $747
– Median household income: $42,037
– Percentage of income spent on housing: 22%
– Cost of living index: 87
El Paso has become a hotspot for Millennials in search of job opportunities, and it ranks highly on the affordability scale. The overall cost of living is 13% lower than the rest of the country and renters spend less than a quarter of their pay on housing.
2. San Antonio, TX
– Median rent price: $840
– Median household income: $46,317
– Percentage of income spent on housing: 22%
– Cost of living index: 86
San Antonio attracts lots of 20-somethings and has the advantage of offering one of the highest median household incomes in our rankings. Again, renters aren’t forking over a significant amount of their take-home pay to keep a roof over their heads.
3. Omaha, NE
– Median rent price: $797
– Median household income: $48,751
– Percentage of income spent on housing: 20%
– Cost of living index: 90
Living in America’s heartland has its perks, especially in terms of income and housing. Omaha residents face a cost of living that’s slightly higher than some of our other cities but they also spend the smallest percentage of their paychecks on rent.
4. Cincinnati, OH
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– Median rent price: $653
– Median household income: $34,002
– Percentage of income spent on housing: 23%
– Cost of living index: 88
Cincinnati boasts the lowest median rent price on our list and it’s a great place to start a career or raise a family. The median income isn’t as high as that of some of our other cities, but with ten Fortune 500 companies in the area, the potential to see your salary go up is very real.
5. Columbus, OH
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– Median rent price: $822
– Median household income: $44,774
– Percentage of income spent on housing: 22%
– Cost of living index: 89
In terms of crime, job opportunities and rent prices, Columbus is a highly livable city for just about anyone. The median household income is high enough that renters should have a real shot at growing their credit score.
6. Indianapolis, IN
– Median rent price: $784
– Median household income: $42,076
– Percentage of income spent on housing: 23%
– Cost of living index: 88
Indianapolis is a Midwestern city that’s heating up in terms of its popularity with younger renters. Urban development projects have spurred the area’s economic growth and rental housing is a bargain.
7. Springfield, MO
– Median rent price: $668
– Median household income: $32,473
– Percentage of income spent on housing: 24%
– Cost of living index: 86
Springfield is Missouri’s third largest city and while it landed at number 7 overall, it has the second lowest median rent price in our rankings. It also tied with San Antonio for the second lowest cost of living.
8. Knoxville, TN
– Median rent price: $745
– Median household income: $33,494
– Percentage of income spent on housing: 27%
– Cost of living index: 84
While Nashville has grown by leaps and bounds in recent years, Knoxville is the better choice when you’re trying to raise your credit score. By comparison, its cost of living is 13% lower than Nashville’s, and the median rent is over $100 cheaper.
9. Phoenix, AZ
– Median rent price: $876
– Median household income: $46,881
– Percentage of income spent on housing: 23%
– Cost of living index: 95
Phoenix is a favorite with retirees but it’s a good fit for people of all ages who want to rent their way to better credit. Residents bring in the second highest median income of the cities in our rankings and even though the cost of living is higher, rent doesn’t cost an arm and a leg.
10. St. Louis, MO
– Median rent price: $742
– Median household income: $34,800
– Percentage of income spent on housing: 26%
– Cost of living index: 91
St. Louis rounds out the top 10 but it ranks third for the lowest median rent price. Housing eats up slightly more of residents’ income but it’s still well below the 30% cutoff that we and other finance experts generally recommend.
Methodology
To get the final 10 cities for our rankings, we analyzed rent, income and cost of living data for the 150 largest U.S. cities by population. Median rent prices and median household income data were drawn from the U.S. Census Bureau. The cost of living index was provided by AreaVibes.
Each city was scored according to how it ranked in four categories: median rent price, median household income, percentage of income spent on housing monthly and the cost of living index. The lower the numerical score, the higher the city ranked in each category.
The scores for all four categories were averaged together to determine our final rankings. The 10 cities listed here are the ones that earned the best scores overall.
| City | Median Rent Price | Median Household Income | Percentage of Income Spent on Housing Monthly | Cost of Living Index | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cincinnati | $653 | $34,002 | 23% | 88 | ||||||||||||
| Springfield | $668 | $32,473 | 24% | 86 | ||||||||||||
| St. Louis | $742 | $34,800 | 26% | 91 | ||||||||||||
| Knoxville | $745 | $33,494 | 27% | 84 | ||||||||||||
| El Paso | $747 | $42,037 | 22% | 87 | ||||||||||||
| Indianapolis | $784 | $42,076 | 23% | 88 | ||||||||||||
| Omaha | $797 | $48,751 | 20% | 90 | ||||||||||||
| Columbus | $822 | $44,774 | 22% | 89 | ||||||||||||
| San Antonio | $840 | $46,317 | 22% | 86 | ||||||||||||
| Phoenix | $876 | $46,881 | 23% | 95 |
