America's love-hate relationship with credit continues: it seems people love to borrow, but hate the consequences. Still, as the amount of outstanding consumer credit continues to reach new highs on a national basis, it's important to recognize that credit conditions vary radically from one part of the country to another.

To pinpoint where the trouble spots are, as well as to highlight where consumers have their credit under control, has done an analysis of the best and worst states for credit conditions. This was based on data from all 50 states, including:

  • Foreclosures rates
  • Unemployment rates
  • Average credit scores
  • Credit card delinquency rates
  • Bankruptcy rates

Based on a combination of these factors, compiled the following lists of the best and worst states for credit conditions.

The ten best states for credit conditions

  1. North Dakota. This state continues to show strong economic performance. The average state has one foreclosure for every 2,578 housing units; in North Dakota, foreclosures occur only once for every 31,552 units. The unemployment rate is just 3.2 percent. North Dakota ranks best of all 50 states in those two categories, and placed second in the other three categories measured in this study.
  2. South Dakota. On the strength of a top-five ranking in all categories, South Dakota was able to climb from the number three slot in last year's ranking to second this year.
  3. Vermont. Generally a top-ten performer in all categories, Vermont saw its credit card delinquencies climb over the past year, so it had a middle-of-the-pack score on that criterion. This lone blemish caused Vermont to fall from second last year to third this year.
  4. Montana. Thanks to a credit card delinquency rate that is tied for lowest in the nation, and a foreclosure rate that is second lowest, Montana repeated last year's fourth-place finish.
  5. Iowa. By ranking among the ten best states in all categories, Iowa repeated last year's fifth-place finish.
  6. Nebraska. Another repeat placement from last year, Nebraska's only so-so performance was a middling ranking for its statewide bankruptcy score.
  7. Hawaii. The big strength here is the fourth-lowest rate of bankruptcies in the nation; the one weakness is a foreclosure rate that is worse than average. On balance, Hawaii was able to climb one spot from last year's overall ranking.
  8. Minnesota. Another state that improved by one slot from last year, Minnesota's residents have the highest average credit score in the nation. Only a sub-par foreclosure rate prevented a higher ranking.
  9. Wyoming. A rise in its bankruptcy rate caused Wyoming to slip a couple spots in this year's overall ranking, but the state still scores very well for its low unemployment and incidence of credit card delinquencies.
  10. New Hampshire. A newcomer to the top ten this year, New Hampshire is better than average in all categories, with a top-five average credit rating its greatest strength.

The ten worst states for credit conditions

  1. Nevada. The unemployment rate has improved by over 2.1 percent in the past year, but Nevada's is still the nation's highest at 9.5 percent. Along with the worst average credit rating of any state, and the second worst foreclosure and bankruptcy rates, this was more than enough for Nevada to repeat as the worst state for credit conditions -- and it wasn't even close.
  2. Georgia. While not worst in any one category, George is in the bottom ten in all five categories, which was why it repeated as the second worst state for credit conditions.
  3. Indiana. (tie) While the national unemployment rate has been getting better, Indiana's got worse over the past year. Similarly, while credit card delinquency rates are generally declining, Indiana's increased. As a result, Indiana moved from the ninth worst to a tie for the third worst state for credit conditions.
  1. Tennessee. (tie)  The bankruptcy rate is now worst in the nation, and Tennessee got worse in that category as well as unemployment, average credit score, and credit card delinquency rate. This explains why the state fell from tenth-worst to a tie for third-worst.
  1. Florida. Florida improved from third-worst last year, but still leads the nation in foreclosure rate.
  2. Alabama. Though it is about average in terms of foreclosure and unemployment rates, Alabama is among the worst five states in bankruptcy rate, average credit score, and credit card delinquency rate.
  3. Illinois. The unemployment rate in Illinois has gotten worse over the past year, and is now tied for the second-highest in the nation. Foreclosure and bankruptcy rates are also major problems in this state.
  4. Mississippi. The good news is that the foreclosure rate in Mississippi is among the lowest in the nation. Beyond that though, the state's problems include the worst rate of credit card delinquencies, the second worst average credit score, and an unemployment rate that is tied for second worst.
  5. Arizona. This state has improved over the past year, but the high foreclosure rate is still the most prominent problem.
  6. Arkansas. Having the third-worst rate of credit card delinquencies was the biggest issue for Arkansas.

Each state has different resources and challenges, but overall credit conditions are clearly much better in some areas than in others. That should be food for thought for any business or individual looking for where the best opportunities may be found.

Don't see your state on the list? View the full list of state rankings.