Best and Worst States for Credit Conditions

CardRatings.com released new research ranking the best and worst states for credit conditions. Highlighted by stark differences in credit circumstances across the U.S., the analysis helps shed light on which states residents are best-positioned to weather the next recession – and which may be at the most risk.

When it comes to having the best credit conditions in the country, North Dakota was the clear winner in this year’s rankings, followed by Vermont and New Hampshire. On the opposite end of the spectrum, credit conditions were found to be the worst in Nevada, with Georgia and Louisiana tied for second-worst.

To determine credit conditions, CardRatings.com’s experts looked at five bellwether factors:

  • Credit scores: Average credit scores from Experian
  • Foreclosures: Foreclosure rates based on figures from Attom Data and the Census Bureau
  • Credit card debt: As a percentage of wages based on data from Experian and the Bureau of Labor Statistics
  • Unemployment: Joblessness rates from the Bureau of Labor Statistics
  • Bankruptcy rates: Based on data from the Justice Department and the Census Bureau

This year marks North Dakota’s third consecutive top ranking in the study. North Dakota has the lowest foreclosure rate in the nation and ranks among the 10 best states in all five categories used in this analysis. Along with North Dakota, this 2019’s best states for credit conditions include:

  1. North Dakota
  2. Vermont
  3. New Hampshire
  4. Minnesota
  5. Massachusetts (tie)
  6. South Dakota (tie)
  7. Iowa
  8. Colorado
  9. Hawaii
  10. Nebraska

While the country as a whole has experienced a decade of economic expansion, there are still several states that show red flags in terms of credit conditions. For Nevada, this is the second year in a row the state showed the worst credit conditions in the nation. Nevada’s bottom ranking was due to being below the median in all five categories and among the ten worst for everything except unemployment rate. Along with Nevada, this year’s worst states for credit conditions include:

  1. Nevada
  2. Georgia (tie)
  3. Louisiana (tie)
  4. Mississippi
  5. Alabama
  6. New Mexico
  7. Tennessee
  8. Oklahoma
  9. Arizona
  10. Illinois

“For states with unfavorable credit conditions, things may soon reach a boiling point if the economy starts to show any cracks or signs of a cool down,” observes Richard Barrington, author the report. “The sharp contrasts in the best and worst states means that the credit conditions of your neighbors matter to the long-term prosperity of the area where you live, with the differences between states being magnified even further if the economy were to slip into a recession.”

Source:  CardRatings.com/Yahoo Finance