The COVID-19 pandemic is one of the biggest public health crises the U.S. has ever faced, but it has been almost as devastating to Americans’ finances as it has to their health. Between hospital bills and sky-high unemployment, the pandemic has put millions of Americans in financial distress. While the CARES Act helped mitigate some of that damage earlier in the year, the lack of a new bipartisan deal has left many people wondering how they will meet their financial obligations.
In order to shed light on the financial troubles experienced by people across the U.S., and to show where those difficulties are most pronounced, WalletHub compared the 50 states and the District of Columbia across nine key metrics. Our data set includes factors like the average credit score, the change in the number of bankruptcy filings between January and July, and the share of people with accounts in distress. WalletHub defines an account in distress as one which either is in forbearance or has its payments deferred. Read on for the results, a comparison of red states and blue states, and a complete description of our methodology.
States with the Most Financially Distressed People during COVID-19
|Overall Rank*||State||Total Score||'Credit Score' Rank||'People with Accounts in Distress' Rank||'Average Number of Accounts in Distress' Rank||‘Change in Number of Bankruptcy Filings - July vs. January’ Rank||‘“Debt” Search Interest Index’ Rank||‘WalletHub “States Where People Need Loans the Most Due to Coronavirus”’ Rank|
|9||District of Columbia||44.98||49||7||9||49||1||39|
*1=State with the Most Distressed Accounts
In order to determine the states where people are in the most financial distress during COVID-19, WalletHub compared the 50 states and the District of Columbia across nine key metrics in six overall categories: 1) Credit Score, 2) People with Accounts in Distress, 3) Average Number of Accounts in Distress, 4) Change in Number of Bankruptcy Filings - July vs. January, 5) “Debt” Search Interest Index and 6) WalletHub “States Where People Need Loans the Most Due to Coronavirus” Score. WalletHub defines an account in distress as one which either is in forbearance or has its payments deferred.
We then determined the weighted average across all metrics to calculate an overall score for each state and used the resulting scores to rank-order the states.
Credit Score – Total Points: 16.66
- Average Credit Score in August: Double Weight (~11.11 Points)
- Change in Credit Score - August vs. January: Full Weight (~5.55 Points)
People with Accounts in Distress – Total Points: 16.66
- Share of People with Accounts in Distress in August: Full Weight (~8.33 Points)
- Change in the Share of People with Accounts in Distress - August vs. January: Full Weight (~8.33 Points)
Average Number of Accounts in Distress – Total Points: 16.66
- Average Number of Accounts in Distress in August: Full Weight (~8.33 Points)
- Change in the Average Number of Accounts in Distress - August vs. January: Full Weight (~8.33 Points)
Change in Number of Bankruptcy Filings - July vs. January – Total Points: 16.66
“Debt” Search Interest Index – Total Points: 16.66
WalletHub “States Where People Need Loans the Most Due to Coronavirus” Score – Total Points: 16.66
Sources: Data used to create this ranking were collected from American Bankruptcy Institute, Google Trends and WalletHub data.