Best and worst states for credit: the complete rankings
July 1, 2011
By: Curtis Arnold
No. 2 Most-Viewed CardRatings.com Article of 2011*
Thrilled that your home state made the 10 best states for credit? Dumbfounded that yours was one of the 10 worst states for credit? Or just curious where your state ranked among the 30 states in between?
Hold on to your hats, because CardRatings.com has analyzed data from the first half of 2011 on five factors affecting credit health in each state, including average credit score, foreclosure rate, credit card delinquency rate, unemployment rate, and bankruptcy rate.
Here is the complete list of all 50 states ranked from best to worst in terms of overall credit health, along with highlights of why they ranked where they did. Tied total scores were resolved based on which state in the tie group ranked highest in the most categories, and lowest in the fewest.
1. North Dakota. North Dakota's top ranking is largely the result of having the lowest unemployment and credit card delinquency rates in the nation.
2. Vermont. Vermont had by far the lowest foreclosure rate in the country.
3. South Dakota. Residents of South Dakota had the second highest average credit score in the U.S.
4. Nebraska. Nebraska had the second lowest unemployment rate in the country.
5. Montana. Montana had the sixth-best average credit score, and the sixth-lowest rate of credit card delinquencies.
6. Wyoming. The strongest point for Wyoming was its unemployment rate, which was seventh lowest in the U.S.
7. Iowa. The strongest factor for Iowa was average credit score, which ranked seventh in the nation.
8. Pennsylvania. Pennsylvania was better than most states in all categories, though in the top 10 in none. Tied with Alaska in overall score, Pennsylvania gets the nod for outscoring the Last Frontier in three out of five categories.
9. Alaska. The nation's lowest bankruptcy rate and second-lowest rate of credit card delinquencies helped propel America's largest state into the top 10.
10. Minnesota. Minnesota rounds out the top 10, largely on the strength of having the highest average credit score.
11. Maine. Maine did better than average in all categories, and ranked among the 10 best states for low foreclosure rates.
12. Kansas. While not among the 10 best states in any category, Kansas was better than average in all five.
13. New Hampshire. New Hampshire was among the best five states for average credit score and low unemployment.
14. Massachusetts. The best category for Massachusetts was average credit score, where it ranked in the top 10.
15. Hawaii. While many warm-weather states seem to be experiencing financial distress, Hawaii was a notable exception.
16. New York. New York was helped by being among the 10 best states for low foreclosure rates and low bankruptcy rates.
17. Connecticut. Connecticut managed a spot in the top 20 despite a relatively high unemployment rate.
18. Virginia. Virginia suffers from more foreclosures than most states, though this is balanced somewhat by one of the 10 lowest unemployment rates in the U.S.
19. Wisconsin. Wisconsin was helped by a high average credit scores and a low rate of credit card delinquencies.
20. West Virginia. Despite fairly low average credit scores, the foreclosure rate in West Virginia is third lowest in the U.S.
21. New Jersey. New Jersey's biggest strength is the nation's sixth-lowest foreclosure rate.
22. New Mexico. Better than average in most categories, but one of the 10 worst average credit scores.
23. Washington. Made the top half of the list despite being worse than most states in foreclosures, unemployment, and bankruptcies.
24. Maryland. A middle-of-the-pack ranking, despite a fairly low unemployment rate.
25. Oklahoma. Another state with a low unemployment rate, but tripped up by poor credit scores and a high level of credit card delinquencies.
26. Texas. The second-lowest average credit score in the nation dragged Texas into the bottom half of the list.
27. North Carolina. Low credit scores and high unemployment were the main problems for North Carolina.
28. Utah. Utah was hurt by being among the worst 10 states for foreclosures and bankruptcies.
29. Missouri. Missouri's scores were fairly middle-of-the-road across the board.
30. Oregon. Oregon did worse than most states in every category except average credit score.
31. Delaware. Foreclosures and credit card delinquencies were Delaware's chief problems.
32. Ohio. Done in by high foreclosure and bankruptcy rates.
33. Rhode Island. The smallest state had the third-highest unemployment rate in the U.S.
34. Illinois. The foreclosure rate in Illinois was the country's ninth highest.
35. Louisiana. Credit scores and credit card delinquencies are among the 10 worst in the nation.
36. Indiana. The weakest point for Indiana is the nation's fifth-highest bankruptcy rate.
37. Colorado. "Atlas Shrugged" used Colorado as a shining example of unfettered economic potential. In reality, it was among the 10 states with the highest foreclosure and bankruptcy rates.
38. Kentucky. Kentucky's relatively low foreclosure rate contrasts with one of the 10 highest unemployment rates in the U.S.
39. South Carolina. Low credit scores, along with high credit card delinquency and bankruptcy rates, dragged South Carolina down.
40. Arkansas. Credit card delinquencies were the chief problem for Arkansas.
41. Idaho. Seventh highest in foreclosure rates.
42. Mississippi. Mississippi had very low foreclosure rates, but was among the worst states for credit scores, credit card delinquencies, and unemployment.
43. Michigan. Foreclosure, unemployment, and bankruptcy rates were all major problems here.
44. Tennessee. The biggest problem for Tennessee was the nation's third-highest bankruptcy rate.
45. Alabama. Alabama was among the 10 worst states for credit scores, credit card delinquencies, and bankruptcies.
46. Arizona. Among the 10 worst in every category except unemployment.
47. Florida. The second-worst state for credit card delinquency rates; unemployment and foreclosures were also problems.
48. California. The Golden State suffered from the nation's second-highest unemployment rate, plus its foreclosure and bankruptcy rates were among the worst.
49. Georgia. Georgia was among the 10 worst states in all five categories.
50. Nevada. The fastest-growing state in the nation before the Great Recession now feels the pain of the collapsed real estate bubble, ranking as the worst state in each of the five categories. But on the bright side, Nevada has a mild, dry climate, no state income tax, and a business-friendly reputation.
Of course, every state has its good points and its bad points. This ranking based on changing economic factors such as foreclosures and credit card delinquencies is for entertainment only, and could be a starting point for reflection on your own credit health.
* Based on monthly page views of articles published on CardRatings.com in 2011.
About the Author
Curtis Arnold, a nationally recognized consumer educator and advocate, has been educating consumers about credit cards since 1998. New! Curtis is the author of 'How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line' (FT Press, 2008). He is also the co-author of the upcoming Complete Idiot's Guide to Person-to-Person Lending (Alpha Books/Pengiun Group USA, April 2009), a contribitor to The Ultimate Allowance (InnerWealth Publishing, 2008) and is extensively featured in 42 RulesTM for Driving Success With Books (Super Star Press, January 2009).