Which States Have the Best Credit in 2022?

Could where you live determine your credit score? Learn which states have the best credit scores and which ones have the worst.
By Kristin Marino
Updated on: November 11th, 2022

If you’re like millions of Americans, you’re trying to build or improve your credit report and FICO score because you know how having bad credit can put a damper on achieving your goals such as getting a mortgage, consolidating your bills, getting the best rate on loans, and even the price of your car insurance.

There are lots of reasons why your credit score is low or why you’re having a hard time building good credit.

Maybe you have student loan debt, don’t have health insurance and have to pay your medical expenses out of pocket, have had an eviction or foreclosure in your past, or you’ve been out of work and are having a hard time paying your bills.

We know that residents of some states have a more challenging time financially than those who live in other states, but could where you live be affecting your ability to build good credit?

AmOne looked at 11 categories across various credit and finance-related topics to determine the best and worst states to build good credit across the U.S.

Here is how the states ranked in terms of the best and worst states.

Key Findings

Number 1 Nebraska edged out Minnesota and New Hampshire in our rankings, number two and three respectively, even though Minnesota boasts the lowest unemployment rates in the country and the highest credit scores in the country.

Like Minnesota, New Hampshire also enjoys the second lowest unemployment as well as the second lowest mortgage delinquency rate in the country.

South Dakota and North Dakota, along with their lowest and third lowest amount of student loan debt averages in the country, round out our top five.

On the flip side, Nevada, known for Las Vegas and its lavish party lifestyle and gambling destinations, ranked last on our list of states in the U.S. to build good credit.

Mississippi, Georgia, Louisiana, and Florida, join Nevada as the worst five states to build good credit in the U.S.

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The Best & Worst States for Building Good Credit

AmOne analyzed all 50 states to find the best and worst states for building and keeping good credit.

We looked at 11 factors that affect credit scores, including credit scores themselves, with all factors being equally weighted.

10 Best States for Good Credit in the U.S.

The best states to build good credit have a low cost of living, a good median income, credit scores in the very good range, and low credit card delinquency rates, among many other factors.

The top states are mostly Midwestern plains states, though a few Northeastern states can be found in some of the top spaces.

While the cost of living tends to be higher in the northeastern states, the incomes are higher, and unemployment is low.

See AmOne’s top 10 states for good credit below.

#1 North Dakota

#2 Minnesota

#3 Nebraska

#4 New Hampshire

#5 Iowa

#6 South Dakota

#7 Wisconsin

#8 Massachusetts

#9 Vermont

#10 Kansas

The 10 Worst States for Credit Scores in the U.S.

While these states have a lot of good things going for them, residents of these states do have the cards stacked against them, relatively speaking, when it comes to building and improving credit.

Over half of the worst states for good credit are in the south, but the number 1 worst state for good credit, Nevada, is in the Southwest, joining Arizona and New Mexico as southwestern states where it’s harder to build good credit.

Nevada is at the top of the list due to a high cost of living, one of the highest unemployment rates in the country, and one of the highest percentages of residents with no health insurance. It also has the highest rate of credit card delinquency rates in the country, as well as one of the highest rates of bankruptcies.

In the southern states, median incomes are on the low side, as are credit scores.

Number 2 Mississippi has the lowest average credit score in the country, the lowest median income, and the second to worst mortgage delinquency rates in the country.

See AmOne’s 10 worst states for good credit in the U.S. below.

#1 Nevada

#2 Mississippi

#3 Florida

#4 Georgia

#5 Louisiana

#6 New Mexico

#7 Delaware

#8 Arizona

#9 Alabama

#10 Arkansas

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Factors That Make a State Good for Building and Improving Credit

We ranked the best and worst states for good credit by looking at 11 key factors for each state and weighing them equally:

  • Number of auto loan delinquencies
  • Average credit score
  • Average consumer debt amount
  • Percentage of mortgage delinquencies 90 days and over
  • Percentage of credit card delinquencies
  • Percentage of bankruptcies relative to population
  • Number of people without health insurance
  • Unemployment rate
  • Median income
  • Cost of living index
  • Average amount of student loan debt

These factors all matter when considering how well residents of a particular state are doing at managing their finances because factors such as not having a job or health insurance directly relate to how well residents are able to keep up with their bills.

When you put other factors into the mix, such as cost of living and median income, you get an accurate idea of why residents of some states have an average higher credit score or a lower bankruptcy rate.

To better understand how good or bad states did in each of our ranking categories, we found the best and worst states for each category.

Auto Loan Delinquencies

Our analysis shows that being late on your car payment directly correlates to your credit score. Minnesota ranks #2 on our list of the best states to build credit, while Mississippi ranks #49.

Average Credit Score

In order to understand what the average credit scores mean to a state, you need to know the credit score ranges.

For FICO credit scores, 850-800 is exceptional, 740-799 is very good, 670-739 is good, 580-669 is fair, and 300-579 is poor.

Minnesota and Mississippi check in with the highest and lowest scores when it comes to credit scores, with Minnesota’s average being very good and Mississippi’s being in the good range.

Average Consumer Debt

There is some good news for Mississippi when it comes to consumer debt accumulation.

Even though the state has the lowest credit score and highest auto loan delinquency rate, it boasts the lowest consumer debt rate.

This could be because wages are the lowest in the state and therefore consumers don’t qualify for higher debt amounts.

Mortgage Delinquencies 90+ Days

Mississippi also has the highest rate of serious mortgage delinquencies, while Washington has the lowest, which also correlates with Mississippi having the lowest credit score.

Credit Card Delinquencies

The Great Plains state of North Dakota boasts the lowest credit card delinquency rate, while the state that ranks #50 on our list, Nevada, has the highest rate.

Nearly 10% of the residents in Nevada aren’t paying their credit card bills on time.

Bankruptcies

Another southern state falls into the worst category, with Alabama having the highest Chapter 7 and 13 bankruptcies when adjusted according to state population.

No Health Insurance

The amount of residents not having health insurance doesn’t seem to have a major impact on where a state lands on our ranking, but because Vermont is in the top third and Texas in the bottom, it does have some impact.

Unemployment Rate

While New York has the highest unemployment rate, Nevada is a close number 2 with a 4.4% unemployment rate.

Median Income

Massachusetts has a high cost of living, while Mississippi has the lowest, so it’s no surprise that the median income in the states reflects that fact.

But Mississippi comes out on the bottom once again, this time with the lowest incomes in the country.

Cost of Living Index

While Hawaii is in the middle of our overall ranking, it’s known as a state where the cost of living is extremely high. While the cost of living is the lowest in Mississippi, it doesn’t help credit scores in the state, perhaps because the wages are the lowest.

Student Loan Debt

Student loan debt doesn’t impact credit scores and building good credit as some of the other factors do, but with North Dakota ranking number 4 on our list and Maryland ranking 42, it appears that taken with other factors, it does have an impact.

Key Takeaways

The southern and southwestern states falter in many of the areas where the midwestern states thrive, but that doesn’t mean just because you live in the south you are doomed to bad credit or if you live in the Midwest you don’t need to think about your credit.

No matter where you live, your credit report and score are ultimately up to you.

Here are some other lessons to be learned from AmOne’s analysis.

You can make your financial situation work, no matter where you live

Even if you live in a state or area of the country where circumstances can make it more difficult to build and keep good credit, some positive factors can make it possible.

You might live in a state where wages are on the low end, but the cost of living may also be lower. By taking on less debt and saving more money, you can build and maintain good credit.

Watch how much debt you take on

Delinquencies and bankruptcies are the fastest way to watch your credit score tank, but keeping costs low and not taking on too much debt can help.

Health insurance matters

While not having health insurance can cause stress in many areas of life, it can also hurt your credit by causing medical debt, which can also lead to delinquency and bankruptcy.

Take note of your state’s cost of living

If you live in a midwestern state with a lower cost of living, it’s easier to have excellent credit.

Unemployment is low, and while wages aren’t the highest, they are enough for most people to keep up with their bills.

Being unemployed deeply affects credit scores

The correlation between unemployment and credit card delinquency is evident by looking at Nevada.

With the second-highest unemployment rate and the highest credit card delinquency rate, it would seem that when someone loses a job and has to make some tough decision as to what bills they are going to pay, it’s credit card bills that are the first to go unpaid.

AmOne's Full Ranking