It’s no fun having a bad credit score. You pay higher interest rates for your credit – if you can get credit. You have little room for financial error. A small unexpected bill can cause big problems.
At least your struggles may not be as severe if you live in certain states.
RewardExpert, a site that helps users optimize credit and debit card reward programs, looked at the factors that affect residents with low credit – such as typical expenses, usury laws to limit charges predatory loans and the status of debt collectors – and how these factors vary in each state.
Where is bad credit more tolerable? Consumers with bad credit should avoid the coastlines and stick to the Midwest – not surprisingly, given the generally high cost of living in coastal areas.
Here are the top ten states to live in when your credit score is low.
1. Iowa – Iowa tops the list doing well in all categories. Iowa is tied for the lowest maximum usury interest rate (currently below 5%) and had the third lowest number of complaints per capita with the Consumer Financial Protection Bureau (CFPB). Residents of Hawkeye State also have a low cost of living with reasonable household incomes.
2. Minnesota – Minnesota has the lowest delinquency rate and a strong economy. An average household income of over $ 80,000 combined with a low cost of living makes it more likely that consumers with poor credit can earn enough to stay ahead of their bills.
3. Nebraska – The history of Nebraska is similar to that of Minnesota, with a slightly higher crime rate and cost of living. The strong state economy and low unemployment rate show low risk to creditors.
4. North Dakota – The overall debt level of North Dakotas is low, and those who incur debt seem to be managing it well. North Dakota only follows West Virginia in the lowest number of CFPB complaints per capita.
5. Wisconsin – The state’s financial health, low credit card debt, and relatively high credit scores help residents of Badger state overcome a relatively high cost of living.
6. Arkansas – Welcome to Arkansas, where the cost of living is one of the lowest in the country – including low home prices. Maximum wear rates are tolerable of 6%.
7. Kansas – Kansas isn’t at the top of any category, but they’re doing pretty well overall. The Sunflower State has one of the best household incomes relative to the cost of living.
8. West Virginia – As noted above, West Virginia has the fewest complaints filed with the CFPB. House prices are the lowest in the country, which helps keep overall mortgage debt under control.
9. Wyoming – Some costs are quite low in Wyoming, including tuition fees. Since student loan debt is second only to mortgage debt in America – and debt collectors are few – Wyoming ranks in the top ten.
10. Oklahoma – There are many debt collectors in Oklahoma, but the cost of living is relatively low and the maximum usury rate is 6%, which makes debt manageable for most Oklahoma residents.
If you’re struggling with debt in any of these states, remember that things could be worse – you could be living in one of these states. ten worst states for bad credit.
No matter where you live, take action to improve your credit score. Pay all your invoices on time and control your spending to reduce your debt. When you have bad credit, it’s imperative to keep your balance low and patiently reduce your debt with on-time payments. Your credit score will improve – eventually.
You can check your credit score and read your credit report for free within minutes using Credit manager by MoneyTips.