States ranked from best to worst for "overall credit health"
Does your state's ranking affect your credit or lifestyle?
Here's an interesting headline, from AOL Daily Finance (July 25):
Can't Get a Loan? Check Your Address: The Best and Worst States for Credit
Credit is ever so personal, and ultimately it's your responsibility -- but maybe this time, it's not solely about you. Where you live matters: Your state's creditworthiness can impact you too.
For that reason, CardRatings.com's recently released rankings of the 10 Best and Worst States for Consumer Credit is worth a look-see.
How does your state measure up?
CARD Act reined in worst behavior
First off, let's examine the first sentence of that post. Well, OK, the first part of that sentence: Credit is ever so personal, and ultimately it's your responsibility. . .
Granted, most people wish their credit behavior and history were, in fact, "ever so personal." But we know that's not true; before the CARD Act, your credit rating could be whacked for almost anything, including paying the electric bill a day late.
Conceded, some improvement has occurred, not only because of CARD but also because of provisions from the Dodd-Frank act, which also created the Consumer Financial Protection Bureau--which could prove to be the best piece of consumer-oriented legislation since they reined in sales of Snake Oil.
Filing for bankruptcy includes staying informed
Let's be clear: Your data is not your own. And the relatively mild reforms that Obama has managed to get passed are no guarantee of a better future for either the poor or the middle class. If you--or your friend, or your loved one--are considering bankruptcy, you simply must take into account what's going on with the economy, with housing, with the debt-ceiling debate. In a country so polarized, we workers at the lower-end of the dollar-chain have must to wonder: "Who's looking out for us?"
Where does personal responsibility begin?
OK, that being said, let's return to the preceding statement about credit, nevermind the "personal data" aspect, but how about this?
. . . and ultimately it's your responsibility
True, to some extent.
That is to say, it's your responsibility so far and so long as you can understand the terms and compare competing products accurately. That's the main thrust of the new Consumer Financial Protection Bureau, and it's about time. For too long credit marketeers have peddled products with contracts and terms so confusing that even lawyers have trouble deciphering the "code."
The Top 10
Now, on to the rankings (the linked page ranks and comments on all 50 states); first, the Top 10:
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.
The Bottom 10
Next, the Bottom 10 (i.e., at number 50, Nevada is supposedly the worst state "in terms of overall credit health"):
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.
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