the top 10 states for credit

Selecting the top 10 states for credit

How did the study identify the best 10 states for credit health? The list considered the following five variables:

• Average credit score (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)

States were ranked from top to bottom in each group. The rankings across all five groups were then totaled, and the top 10 states for credit were determined based on those totals.

The 10 states with the best credit overall health

It can be something about the cold weather that makes folks economically conservative, or maybe it is because much of the northern plains and Rockies didn't have the boom-and-bust cycle that continues to trouble many warm-weather locations. Whatever the reason, there is a heavy weighting toward cold-weather states in the top ten states for credit. Here's the list of the top 10, with a description of what stood out about credit conditions in each state.

1. North Dakota. North Dakota turned out on top in this survey by having the best rates of joblessness and credit card delinquency of any state within the U.S., and also by being one of the better five states in all categories used for this study.

2. Vermont. This Northeastern state has the lowest rate of home real estate foreclosures, by a very wide margin. While nationwide one of every 2,370 homes is in foreclosure, there is just one foreclosure for each 39,281 homes in Vermont. Like North Dakota, Vermont was one of the five best states in all five categories examined.

3. South Dakota. The home of Mount Rushmore was just topped by Vermont, but rates within the top six in every five groups, including having the second-best average credit history in the United States.

4. Nebraska. After North Dakota, Nebraska has the second-lowest unemployment rate of any state, and rates among the list of 10 best states for average credit score, foreclosure rates and credit card delinquency rates. However, it falls behind a bit with regards to bankruptcy rates, where it ranks around the middle of the pack.

5. Montana. Montana made this list on the strength of being one of the best ten states for credit scores and low credit-based card delinquencies, and was clearly above-average in all of the five categories

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6. Wyoming. Wyoming was among the best 10 states in four out of five areas, missing only when it comes to average credit score. Wyoming's average credit score of 703 merely few points greater than the nation's average of 696.

7. Iowa. Iowa ranked among the 10 best states for credit scores, lower credit card delinquencies, and low joblessness, but fell down to some degree when it came to foreclosure rates. Iowa's rate of one foreclosure for every 878  homes is worse compared to national average, and worse than the foreclosure rates of 28 other states.

8. Pennsylvania. An excellent overall contender, Pennsylvania didn't rule a single type, but made the list because they are continually pretty good overall. Pennsylvania wasn't in the top 10 in any group, but was above average in all five categories.

9. Alaska. Toward the end of the top 10, scores became more of a mixed bag, with good ratings in some groups, but a low enough score in one or more category to pull a state's ranking down. For example, Alaska had the lowest bankruptcy rate in the nation, and the second-lowest rate of credit card delinquencies. Despite that, it was let down by having a below average credit score.

10. Minnesota. Like Alaska, Minnesota had excellent rankings in some categories that were pulled down by below-average performance in one aspect of credit conditions. Minnesotans have the highest average credit scores of any state in the nation, but the state is a bit worse than average when it comes to foreclosure rates.