[HN Gopher] Texas ranks as No. 1 state with the most people in f...
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Texas ranks as No. 1 state with the most people in financial
distress
Author : paulpauper
Score : 28 points
Date : 2025-07-20 17:18 UTC (5 hours ago)
(HTM) web link (dallas.culturemap.com)
(TXT) w3m dump (dallas.culturemap.com)
| chris_wot wrote:
| I do wonder how much of this can be put down to an extremely lax
| regulatory environment within Texas itself.
| crnvbikwblcps wrote:
| > To determine the states with the most financially distressed
| residents, WalletHub compared all 50 states across nine metrics
| in six major categories, such as average credit scores, the share
| of people with "accounts in distress" (meaning an account that's
| in forbearance or has deferred payments), the one-year change in
| bankruptcy filings from March 2024, and search interest indexes
| for "debt" and "loans."
|
| Any state "financial distress" study where California ranks #12,
| New York #19 and Hawaii #50 is suspicious. The search engine part
| is especially nonsense.
| carefulfungi wrote:
| The methodology is arbitrary and is mostly a measurement of
| average credit score.
|
| Methodology: https://wallethub.com/edu/states-with-the-most-
| people-in-fin...
|
| This Equifax article lists CA has having a better average
| credit score than Texas. I did't bother to sort the Equifax to
| list to see how closely to correlates to the article, though.
|
| https://www.equifax.com/personal/education/credit/score/arti...
| toomanyrichies wrote:
| Here's the sorted Equifax list:
|
| Minnesota 730
|
| New Hampshire 727
|
| Wisconsin 727
|
| Vermont 726
|
| Massachusetts 723
|
| South Dakota 722
|
| Washington 722
|
| Colorado 720
|
| Maine 720
|
| Montana 720
|
| North Dakota 720
|
| Nebraska 720
|
| Hawaii 719
|
| Iowa 719
|
| Utah 719
|
| Idaho 718
|
| Connecticut 717
|
| New Jersey 717
|
| Oregon 717
|
| New York 713
|
| Pennsylvania 713
|
| Rhode Island 713
|
| Wyoming 713
|
| California 712
|
| Illinois 712
|
| Kansas 712
|
| Virginia 712
|
| Michigan 710
|
| Alaska 709
|
| Maryland 706
|
| Ohio 706
|
| Delaware 705
|
| Missouri 705
|
| Dist. of Col. 704
|
| Indiana 704
|
| Arizona 703
|
| North Carolina 699
|
| Florida 698
|
| Tennessee 697
|
| Kentucky 695
|
| New Mexico 695
|
| Puerto Rico 695
|
| West Virginia 693
|
| South Carolina 692
|
| Nevada 691
|
| Arkansas 688
|
| Oklahoma 687
|
| Georgia 686
|
| Texas 686
|
| Alabama 685
|
| Louisiana 680
|
| Mississippi 675
| ariwilson wrote:
| Any ranking of states that ends with Mississippi is one I
| can get behind
| elevation wrote:
| Credit score is not a useful measure of financial health.
|
| A minimum wage worker living paycheck to paycheck but making
| minimums on a large credit card balance will have a better
| score than a retiree who's long since paid off his house and
| car and pays cash for entertainment and playthings.
| toomuchtodo wrote:
| The minimum wage worker will not be making the minimum
| payment successfully on their credit card balance (bottom
| sixty percent of Americans cannot afford a basic quality of
| life [1] [2]). They likely can't produce $500 for an
| emergency, and use credit products with interest rates as
| high as ~30-35% with credit lines no larger than a few
| hundred or thousand dollars. The retiree you mention in
| your example will have an 800+ FICO credit score due to
| longevity of their trade lines (decades) and likely no
| inquiries (because they don't need to seek credit) or
| missed payments.
|
| Cash flow underwriting would paint this picture better [3],
| but is still not widely performed outside of an org
| containing the deposit account (internal underwriting for
| credit products that don't have to conform for asset backed
| security sales). So, credit score is a reasonable proxy at
| this time for household financial health (imho) [4] [5]
| based on research performed by the CFPB.
|
| [1] https://www.cbsnews.com/news/cost-of-living-income-
| quality-o...
|
| [2] https://lisep.org/mql
|
| [3] https://fintechtakes.com/articles/2024-05-22/cash-flow-
| under...
|
| [4] https://www.consumerfinance.gov/about-us/blog/new-
| report-exp...
|
| [5]
| https://files.consumerfinance.gov/f/documents/cfpb_credit-
| ka...
|
| (day job is in finance/consumer credit)
| fragmede wrote:
| Do you have any numbers as to why those rankings should be
| suspicious, or is it down to preconceived notions about people
| from those particular states you've met and you're projecting?
| RandomBacon wrote:
| Having lived in Honolulu for several years, I'm quite
| surprised that Hawaii is last on the list for "financial
| distress".
|
| Although maybe they're just better at leaving within their
| means, which is very hard when salaries are low and things
| are very expensive. The way of life there is generally
| healthier, so perhaps people don't need to do as much "retail
| therapy" or other terrible financial ideas.
|
| I wonder how that list correlates to a happiness ranking. I
| think Hawaii was at the top of the list last time I heard a
| year or two ago.
| malshe wrote:
| > The search engine part is especially nonsense
|
| Maybe you need to read "Everybody Lies":
| https://www.harpercollins.com/products/everybody-lies-seth-s...
| WorldWideWebb wrote:
| Just making sure you're aware of the size of California and New
| York. Yes - has a small chunk of very affluent residents, but
| also huge populations, loads of people living well below the
| poverty line, high percentage of undocumented workers (also
| likely living below the poverty line), and a huge mix of both
| urban and rural populations. Those rankings don't strike me at
| all as odd.
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