Hacker News Reader

Comment by crnvbikwblcps | Hacker News Reader

[flagged]

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...

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.

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)

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

Any ranking of states that ends with Mississippi is one I can get behind

> The search engine part is especially nonsense

Maybe you need to read "Everybody Lies": https://www.harpercollins.com/products/everybody-lies-seth-s...

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.

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?

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.

Typo: I meant "living", not "leaving"

Reply on news.ycombinator.com