Montana Takes the Prize for Money Management

1764If you live in Montana, chances are you have mapped out your household budget and stick to it. You also pay your bills on time, put money in savings, use credit cards responsibly and keep your debts low. At least that’s the takeaway from a recent survey that showed Montana residents are the best money managers in the United States.

The survey, which used credit score data from Experian to determine which states had the best money-management skills in the country, put Montana in first place, with the Dakotas right behind it. South Dakota came in second, and North Dakota took third place. Maine and Vermont were fourth and fifth, respectively.

On the other end of the scale, Maryland came up at the bottom of the list. Even though the state has the second-highest median income in the United States, its residents don’t necessarily manage that income well. Maryland has the 31st best credit score in the nation, in spite of their relative wealth. That just goes to show that having more money doesn’t always equal having a better credit score.

The study looked at a state’s average credit score compared with its median income. Median income means that half of residents make more, and half make less. Montana’s median income is 13% lower than the national median income, making it one of the comparatively poorer states in the country. But that doesn’t mean folks have fewer financial skills, at least according to this survey.

The worst states for money management

Keeping Maryland company at the bottom of the list was its next-door neighbor, Washington, D.C. A long way north, Alaska came in at number 49 for money management savvy. Virginia, number 48, and Texas, number 47, rounded out the worst five states for financial know-how.

To achieve and maintain an excellent credit score, people need to do five things: pay all their bills on time, keep their debt-to-credit ratio low, have a long credit history, use a few different types of credit, and refrain from applying for too many lines of credit in a short period of time. Those are the factors credit bureaus weigh when giving a credit score. It’s especially important to keep accounts open (to maintain a longer credit history), not max out your credit cards (to keep your debts low, relative to the amount of credit you have available), and make payments on time.

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