The 10 Worst Credit States

If one member of a community has bad credit, that's a personal problem. If enough people in that community have bad credit, it can quickly become a problem for everyone in the area...even if you hold one of the best credit cards and are using it responsibly.

credit statistics in all 50 states were analyzed to give a general idea of which states are on a slippery financial slope. Companies looking for places to do business, and individuals looking for places to live and work, need to know whether the environment they choose has a healthy financial foundation, or has some work to do -- which in some cases could mean bargains aplenty for those taking the long view.

How credit health was measured

CardRatings.com looked at five criteria to assess overall credit conditions on a state-by-state basis:

• Average credit scores (Experian, June 2011)
• Foreclosure rates (RealtyTrac, May 2011)
• Credit card delinquency rates (TransUnion, Q1 2011)
• Unemployment rates (Bureau of Labor Statistics, May 2011)
• Bankruptcy rates (American Bankruptcy Institute, Q1 2011)

All 50 states were scored based on each of these criteria. The rankings were then combined, and the states with the lowest combined score were ranked as the worst states for credit conditions.

Based on this analysis, CardRatings.com presents the 10 worst states for credit, along with some commentary on why each state made the list.

The 10 states with the worst credit health

Based on the five criteria listed above, the following are the 10 worst states for credit.

1. Nevada. Normally in this kind of analysis, each state will have some strengths and weaknesses, but when it comes to credit health, it's just bad news across the board for Nevada. Remarkably, Nevada came in dead last out of the 50 states in each of the five criteria CardRatings.com used to measure credit conditions, which of course makes the Silver State dead last overall.

2. Georgia. Georgia is the second-worst state for bankruptcies, and fourth worst for credit card delinquencies. In all, Georgia ranked in the bottom 10 in all five categories of credit factors.

3. California. The Golden State is not shining so brightly economically these days, and those troubles are reflected in California's credit conditions. California has the second-highest unemployment rate in the nation, the third-highest foreclosure rate, and the fourth-highest rate of bankruptcies.

4. Florida. With a score tied overall with California, but leading the Golden State in three out of five categories and thus ranked higher, the most significant credit problem in Florida is having the second-worst rate of credit card delinquencies in the nation. Foreclosures and unemployment are also among the 10 worst.

5. Arizona. Like other warm-weather states on this list, Arizona went through a cycle of boom-and-bust, which has exacerbated economic problems in the Grand Canyon State. This is reflected by Arizona's rank as the second-worst state for foreclosures. Arizona is also among the 10 worst states for credit scores, credit card delinquencies and bankruptcies.

6. Alabama. The foreclosure rate in Alabama is actually lower than in most states, but credit conditions in the state are undermined by being among the 10 worst states for credit scores, credit card delinquencies and bankruptcies.

7. Tennessee. Like Alabama, Tennessee made the overall list of the 10 worst states for credit conditions despite having a lower foreclosure rate than most states. In Tennessee's case, its chief Achilles' heel is having the third-highest rate of bankruptcies out of all 50 states.

8. Michigan. Make no mistake about it: While U.S. automakers have bounced back from the verge of bankruptcy, Detroit is no longer close to the manufacturing powerhouse it once was, and neither is Michigan's economy. Though the state does have a lower rate of credit card delinquency than most states, Michigan is among the 10 worst states for foreclosures, unemployment, and bankruptcies.

9. Mississippi. Mississippi made this list despite having one of the lowest foreclosure rates in the nation. Why? Because like its neighbor Alabama, Mississippi ranks among the five worst states for credit scores, credit card delinquencies, and unemployment.

10. Idaho. Average credit scores in Idaho are actually better than in most states. However, Idaho is below average in every other category, including having the seventh-worst rate of foreclosures in the nation.

What if you live in a bad credit state?

Even if you have good credit, living in a state with generally poor credit conditions can affect you in these ways:

• Local lending institutions may be in weakened financial condition, which could limit the type and quality of financial services available to you.
• Outside financial institutions might be reluctant to extend credit or generally make services available in an area where people have a poor record of making payments on time.
• Living in an area where many people are financially distressed is ultimately likely to affect even those who have avoided excess credit card debt and other credit problems. It can result in a slower local economy, which would affect employment and business conditions, and can drag down real estate values.

So, while maintaining good credit is an individual responsibility, it is also wise to know the general credit health of the people around you as well.

Would it Hurt My Credit Score if I’m Denied Credit?

Would it Hurt My Credit Score if I’m Denied Credit?


 Whenever you obtain a loan or credit card, the credit grantor critiques your credit report and score usually using an computerized underwriting system. A credit inquiry is placed on your credit file, which indicates that a business has reviewed your file. The query includes the business name and date of the query. The inquiry doesn't indicate whether your application was approved or denied.


 One thought is always to make an effort to match a newly opened account with a recent inquiry as a rudimentary method of determining whether or not the inquiry lead to an approval or denial of credit. However, it is unlikely loan providers would attempt to match the inquiry with an account. The fact that an account wasn’t opened doesn’t necessarily indicate that you were declined; you might have decided not to accept the credit card or loan. And, the lender may choose not to report their accounts to the credit agencies.

 Inquiries for credit during the past 12 months could affect your score. To deal with shopping for a mortgage, car loan or student loan, queries of these kinds within the past 30 days are not counted. Prior to that, mortgage and auto inquiries within each 45 day period are combined as one inquiry. It is advisable to do your credit shopping within a Thirty day period.

Applications for other loans or credit cards do not benefit from the same treatment. The fact that you were rejected does not hurt your score, but the query can have an impact dependant on its type. Too many inquiries in a short period of time will have more of an impact than isolated inquiries. By law, you are to receive a written justification of the reason why you were declined and where to get a copy of the information that was used. If it was a credit reporting agency, you would be given the name, address and phone number. And, after July 21, 2011 (yesterday) the denial has to be accompanied by the same credit score used by the lender to make their decision.

Here is a Secured Card for Almost Everybody

Here is a Secured Card for Almost Everybody

http://www.asecuredcard.com/

In case your credit was ruined during the Great Recession, using a secured credit card is often a good way to help boost your standing.

That is, if you're able to get a secured card. Read on!

Not everyone may be immediately eligible, particularly if you have a recent bankruptcy on your record. A reader of my blog who recently emerged from bankruptcy wrote to me after she and her husband were denied secured credit cards from Citibank. That, at least in my mind, raised several questions: Are people emerging from bankruptcy unable to obtain a secured card? Are there other situations where you’re likely to end up denied? And is the passing of time the only option for the huge numbers of people whose credit has been ruined in the recession?

Secured credit cards appear to pose minimal risk to the card issuer. After all, the cardholder is required to put a certain amount of money into a bank account, say $250 or $500, which is used as collateral. And the available amount of credit is often equal to the amount on deposit. By using these cards strategically, a person with poor credit can speed up the recovery process by demonstrating positive behavior: charging only small amounts and paying off their balance each month.

You need to dilute the negative information on your credit report, and there is no better way to do that compared to a secured card. Some banks want to be sure that the bankruptcy is well behind the applicant, and, in some cases, penalize them a bit for getting into trouble. These companies should not be in the business of penalizing – they are in the business of making money on lending it, based on risk factors. Within secured cards, there is little risk, being that the consumer is borrowing their own money.

I do know that many credit card issuers do deny a secured card based on credit standing. However, there is one that I am aware of that does not and does not charge exorbitant fees to do it:

www.asecuredcard.com.

1. NO CREDIT CHECK REQUIRED!

2. The interest rate, at present, is Prime plus 6.5% Variable APR. It is not an Introductory rate.

3. No upfront or monthly fees: Just a flat $50 annual fee.

4. There are 4 ways to fund your deposit.

5. Accepted everywhere you see the VISA logo.

6. They report to all 3 bureaus!

7. Choose your credit limit from $200 to $3,000.

There is one caveat in the use of ANY credit card: Do not charge more than 50% of the limit or have more than 50% as a balance at any one time, if you want to maximize your credit scoring benefits.

Credit Card Facts you Probably Do Not Know

Here are a few credit card facts you most likely didn't know:

•             In 1950, Diners Club became the first company to provide a credit card that could be used at multiple locations. Initially the credit card was accepted at just 14 restaurants in New York. Nevertheless, inside a year, greater than 20,000 people were using it.

•             Diners Club founder Frank X. McNamara came up with the concept one evening after eating at a restaurant -- and noticing he had forgotten his wallet.

•             By 1952, Diners Club had been accepted by 400 restaurants, 30 hotels, 200 car rental agencies and four florists. Even so, McNamara, thinking credit cards were only a fad, sold his share of the business that year for $200,000 -- equal to roughly $1.6 million today.

•             Unfortunately for McNamara and his heirs, credit cards weren't a fad. Around the world, there are now 10,000 credit card transactions made every second.

•             Today, Americans have an astounding 609.8 million credit cards in their wallets. If all those cards were stacked up, they would produce a tower 288 miles high.

•             In 1958, Bank of America launched the initial general-purpose credit card by mailing 60,000 real BankAmericard credit cards to the good people in Fresno, Calif. That unsolicited credit card "drop" was the brainchild of bank employee Joseph P. Williams.

•             By October 1959, 2 million unrequested Bank Americards had been "dropped" throughout California. Unfortunately, the loose lending standards imposed by Williams' innovative marketing strategy led to more than one of every five accounts being delinquent. Credit card fraud caused even more difficulties for the bank. As a result, Bank of America initially lost $8.8 million on the start of its new credit card -- and Williams lost his employment.

•             In case you're wondering, the first BankAmericards were made of paper and had a credit limit of $300. The conditions and terms also held the cardholder liable for all charges -- including those resulting from fraud.

•             Today, federal law states that your maximum liability for unauthorized credit card use is $50 per card -- and $0 for any charges that accrue after you report a card lost or stolen.

•             Speaking of fraud, MasterCard introduced the first credit card hologram in 1983 to help thwart counterfeit credit card operations.

•             In 1976, BankAmericard changed its name to Visa. It wasn't the only credit card to rebrand itself: Until 1979, MasterCard was known as MasterCharge.

•             American Express introduced the first credit card made of plastic in 1958. Additionally, it introduced the initial credit card made of anodized titanium: the highly exclusive Centurion card (informally referred to as Black Card).

•             Before you get any bright ideas, keep in mind that on top of the annual $2,500 fee, American Express' Centurion card also has a one-time initiation fee of $5,000.

•             As far back as the mid-19th century, and up until the modern times credit cards first appeared, high-end merchants issued "charge coins" to their best customers. These coins, usually made of metal, were only available in many different shapes and sizes, and several also had holes that allowed them to be placed on a key chain. The charge coins also had a exclusive client identification number stamped onto them.

•             While charge coin identification numbers were usually no bigger than five or six digits, most credit cards today have 16. The first digit in the string is an identifier that denotes the type of industry that issued the card:

o             1 and 2 are for air carriers.

o             3 is for travel and entertainment.

o             4 and 5 indicate a banking or financial institution.

o             6 is for merchandizing and banking.

o             7 is petroleum, or the gas card.

o             8 is for telecommunications.

o             9 is for other assignments.

•             Although the first six digits of your credit card number are known as the issuer identification number, you don't need all six digits to necessarily tell what type of card you have. For instance, cards that begin with 34 or 37 are American Express. Visa cards begin with a 4, and MasterCards start with numbers between 51 and 55. Regarding Discover cards, they start with 6011.

•             Digits 7 through 15 make up your own personal credit card account number.

•             Here's another math trick: Should you have a credit card balance of $2,500 with an interest rate of 18%, and only make minimum payments equivalent to the interest for the month plus 1% of the balance, it will take you 17 years to repay it at a total cost of $5,673.22. Obviously, that's only true if you also cut up the card and never use it again. I bet the credit card companies wish you didn't know that.