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States Where Debt Is Increasing the Most During COVID-19

  • Written by Steel Rose

Though debt in collection increased slightly, the percentage of people with debt in collection actually declined — edging down from 29.68% to 29.1%, a drop of 0.58 percentage points. That belt-tightening helped Americans bolster their credit score. The median credit score increased by 11 points, from 693 to 704. According to the nonprofit think tank Urban Institute, most Americans shored up their bank accounts and kept their spending in check. The median amount of debt in collection nationwide rose a scant $16 between February and October 2020, inching up from $1,833 to $1,849. 

Going state by state, median debt in collection climbed in 29 states, but median credit scores rose in all states. Median debt in collection declined the most in North Dakota, falling by $244 to $1,914. In the state where median debt in collection increased the most, it rose by $120 to $2,242. The amount of median debt in collection in October 2020 ranged from $1,315 to $2,509.

Nationwide, mortgage delinquency rate also fell, from 3.02% to 1.57%, a significant decline of 1.45 percentage points. The only state with a rise in mortgage delinquencies was Hawaii. Interestingly, Hawaii residents are the least likely to own their own homes in the nation — these are the states with highest homeownership.

To identify the states where debt in collection increased the most during COVID-19, 24/7 Wall St. ranked each state by the change in median debt in collection from February 2020 to October 2020 using data from Urban Institute’s “Credit Health During the COVID-19 Pandemic” report. To read more, click here.