The 10 best states to live in when your credit score is low

It’s no fun having bad credit. You pay higher interest rates and have no margin for financial error. Find out where life is easiest with bad credit.

It’s no fun having bad credit. 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 difficulties might not be so severe if you live in certain states.

RewardExpert, a site that helps users optimize credit and debit card reward programs, looked at factors that affect low-credit residents — such as typical expenses, usury laws to limit loans predators and the status of debt collectors – and how these factors vary in each state.

Where is bad credit most tolerable? Consumers with bad credit should avoid the coasts and stick to the Midwest – not surprisingly, given the generally high cost of living in coastal areas.

Here are the ten best states to live in when your credit score is low.

1.Iowa – Iowa tops the list by doing well in every category. Iowa is tied for the lowest maximum usury interest rate (currently below 5%) and has the third lowest number of complaints per capita with the Consumer Financial Protection Bureau (CFPB). Hawkeye State residents also have a low cost of living with reasonable household incomes.

2. Minnesota – Minnesota has the lowest crime rate and a strong economy. An average family 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 anticipate their bills.

3.Nebraska – Nebraska’s story is similar to Minnesota’s, with a slightly higher crime rate and cost of living. The state’s strong economy and low unemployment rate pose low risk to creditors.

4. North Dakota – The overall indebtedness of North Dakotans is low and those who do indebted seem to manage it well. North Dakota trails only West Virginia in the lowest number of CFPB complaints per capita.

5.Wisconsin – The state’s good financial health, low credit card debt, and relatively high credit scores help Badger State residents 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 real estate prices. Maximum wear rates are 6% tolerable.

7.Kansas – Kansas isn’t top of any category, but they’re doing reasonably 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, keeping overall mortgage debt in check.

9.Wyoming – Some costs are quite low in Wyoming, including tuition. Given that 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 attrition rate is 6%, making debt manageable for most Oklahomas.

If you’re struggling with debt in any of these states, remember that things could be worse – you could be living in one of the ten worst states for bad credit.

No matter where you live, take steps to improve your credit score. Pay all your bills on time and control your expenses 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.

This article was provided by our partners at

To learn more about MoneyTips:

Get a car loan even with a low credit score

What Happens If You Ignore Debt Collectors

Do nothing and get a higher credit score

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