US STATES WITH MOST FINANCIALLY STRAPPED RESIDENTS RANKED, STUDY REVEALS

Matt Case - July 29th, 2024 - 12:11pm PDT 

US States with Most Financially Strapped Residents Ranked, Study Reveals

A recent survey by a personal finance company has unveiled which US states have the most financially stressed residents, and the findings may come as a surprise.

WalletHub published its study, titled "States with the Most People in Financial Distress," on July 17. The study used nine key metrics, including credit score changes and internet searches for terms like "debt" and "loans," to compile its rankings.

“Our data set includes factors like the average credit score, the change in the number of bankruptcy filings between March 2023 and March 2024, and the share of people with accounts in distress,” WalletHub explained.

While there were no clear-cut regional trends, states in the Southeast tended to have the most financially distressed residents, whereas states in New England and the Midwest were the least distressed. Here’s how the states ranked, from least to most financially distressed:

1. Michigan

2. Texas

3. Nevada

4. Tennessee

5. Rhode Island

According to WalletHub, Michigan topped the list as the most financially distressed state in the first quarter of 2024. The Great Lakes State had “the most accounts per person in financial distress, meaning accounts where the account holder was temporarily allowed to not make payments due to financial difficulty.”

"Michiganians also had the second-highest increase in the share of people with distressed accounts between Q1 2023 and Q1 2024, at over 70%," the study added.

Despite Texas boasting a $2.4 trillion economy, the Lone Star State followed closely behind Michigan in financial distress.

“Texans are having a number of economic struggles, which are demonstrated by the fact that residents had the third-lowest average credit score in the country in Q1 2024,” WalletHub reported.

“Texans also search Google for ‘debt’ and ‘loans’ at a high rate, which shows that many people are desperate to borrow, despite already owing money.” According to WalletHub analyst Cassandra Happe, measuring states by financial distress is an efficient way “to take the pulse of a state and see whether people are generally thriving or having trouble making ends meet.”

“When you combine data about people delaying payments with other metrics like bankruptcy filings and credit score changes, it paints a good picture of the overall economic trends of a state,” Happe said.

For more information on the study, visit WalletHub's official website.