Which States Made the Most Strides Since Housing Crisis?

Cardratings.com recently released its results from a national study that it conducted on the best and worst states for credit conditions.

The top five best states are North Dakota, South Dakota, Vermont, Montana, and Minnesota. The average credit score for North Dakota residents averaged 19 points higher than any other states in the study. In addition, foreclosures in North Dakota are one-tenth as common compared to other states across the nation.

During the study, Cardratings.com used five-key categories to help collect data from each state-average credit scores from Equifax, foreclosure rates from Attom Data Solutions, credit card delinquency rates from TransUnion, unemployment rates from the Bureau of Labor Statistics, and bankruptcy data from the U.S federal court system.

States in the top five all recorded unemployment rates of 4 percent or lower compared to the five worst states, which average 5 percent or above. Alabama and Georgia have the worst credit conditions in the country, with Nevada, Louisiana, and Mississippi rounding out the bottom five.

So, which states are moving in the right direction since the first study was conducted back in 2011? Idaho was listed as one of the top 10 worst credit conditions and since then it has moved up 27 spots. California previously ranked in the bottom three, but as of today, its currently in the top 25, and Colorado has moved up 25 spots and now is currently ranked 13.

Some states that are headed in the other direction are New Mexico and Pennsylvania, which have both dropped 21 spots since the original study back in 2011, and Oklahoma has fallen into the bottom 10.

Foreclosures are three times more common in New Jersey compared to any other state and bankruptcies are more common in states like Tennessee and Alabama. Meanwhile, the average credit score in Mississippi is 37 points lower than the national average.

“We hear a lot of statistics about the national economy,” says Richard Barrington, the financial analyst who conducted the study for CardRatings.com, “but the truth is that economic conditions are very personal. They vary from household to household, but also there are striking regional differences.”

“Whether it is an individual looking to relocate or a business considering expansion into a new region, it is important for local credit conditions to be a factor in these decisions,” says Barrington. “While household credit is largely a matter of personal responsibility, area conditions can have a strong influence on one’s ability to build a good credit history.

The full study can be viewed here.