Tess Vigeland: Every list has to have someone at the bottom. And when it comes to the average credit score for U.S. cities, three of the bottom five are in Texas. There's El Paso and Corpus Christi. And at the very bottom: The border town of Harlingen. Experian's second-annual national survey (PDF) found the average credit score there is 684. In a moment, we'll tell you about the city with the nation's best score.
But first Texas Public Radio's David Martin Davies finds Harlingen is full of tough lessons in what not to do with your credit.
David Martin Davies: At the Harlingen Auto Credit used car lot, there is a row of faded red-white-and-blue banners flapping in the breeze. They read come-ons to potential customers -- "We finance," "EZ terms" and "Buy Here/Pay Here."
Right now, there aren't any car shoppers, so salesman Al Galvan is inside manning the phones. Galvan wasn't surprised to learn that Harlingen has the worst average credit score in the nation. After all, he makes his living selling cars to people with terrible credit.
Al Galvan: Your income pretty much dictates what you drive.
Income in the Rio Grande Valley is low. The per capita income is less than $14,000 a year. A quarter of the population is under the poverty line.
Galvan doesn't even check credit scores. He knows his customers are risky, so he has a secret weapon: It's a GPS kill-switch that can remotely shut a car down cold.
Galvan: Whenever they just disappear and don't make payments, it's shut off and they come in here and make their payment and they're back on the road.
Credit counselor Olga Gonzalez tells her troubled clients to avoid places like Harlingen Auto Credit. Lucina Soto came to the Harlingen Community Development Corporation looking to qualify to buy a government-backed house. Gonzalez told her to steer clear of debt and build up that credit score.
Olga Gonzalez: Lucina came to us two years ago and we denied her. Lack of credit, no credit. She wasn't fully employed then. She was told what she needed to do and now she's back and trying again.
Lucina is a U.S. citizen but speaks only a little English. But she knows the important words when it comes to credit cards
Lucina Soto: Swipe it, just swipe it.
At first, Lucina had no credit score. She worked at the flea market and lived in the cash-only economy. Gonzalez told her to build her credit by taking out some easy loans from a corner local lender. Mission accomplished -- but then came the credit card offers. And Lucina started swiping. Her credit score crashed. It's now at 653.
Gonzalez warns her clients not to rack up more than 30 percent of their credit limit.
Gonzalez: So if they give you a thousand, your credit card should only be at $350, because going over 50 percent brings your credit scores down.
Fabiola Nunez is another client for Gonzalez and at first she tried to rebuild her credit by going to a neighborhood so-called "credit repair" agency.
Fabiola Nunez speaking in Spanish
Fabiola said the credit repair was a scam. They took her money and didn't pay her bills. They left her poorer and torpedoed her credit score. Gonzalez said this is a common story in Harlingen and she cautions her clients.
Gonzalez: Do not go pay the $500 -- when you can do it yourself -- attend these classes and let's put you on a payment plan. You can call the lender. They will work with you, they set up a plan.
Fabiola's credit score also took a beating when she did something that many in Harlingen do without a second thought: She lent her Social Security number to a friend. It was basically self-inflected identify theft.
Gonzalez: They're giving someone a couple of hundred dollars for the Social Security card so that they can work here. Well, in the end, these people are using the number to purchase stuff. And here three, four years later, they've opened up so much credit you have no scores now.
Many of these problems can be traced back to the lack of financial literacy. Bertha Garza is a vice president with the International Bank of Commerce. It's a regional bank with deep roots on the border. Garza says the big problem is a large part of the local population is unbanked.
Bertha Garza: People that do not know and can not trust the banking system, because they don't understand it. They've never deposited in a bank and they don't know how it works.
She started a program called "Money Smart" to teach financial literacy in local schools starting in the 5th grade.
Garza: Little by little, we are changing the community. It's going to take years.
Garza said if people in the Valley are going to find some upward economic mobility they need to understand how money and credit works -- for you and against you.
In Harlingen, Texas, I'm David Martin Davies for Marketplace Money.