Red states outscored blue under Obama

It's the classic election year question: Are you better off now than you were four years ago?

As the primary season gets under way, expect to hear some version of that question with increasing frequency. Your answer may depend on where you live - and how you vote.

A CardRatings.com study used financial data from Experian to identify which states have been the biggest winners and losers over the past four years, and compares those results with how those states voted in the 2008 presidential race - red or blue.

Using average credit score as a measure of household financial health, red states (those voting Republican in 2008) have generally fared better than blue states (those voting Democrat in 2008) under President Obama. Will that be enough to change votes in 2012? That may depend on whether voters in those states see the glass as half full or half empty.

CardRatings.com found that blue states enjoy higher credit scores, on average, than red states. At the same time, while credit scores declined in both blue and red states as a group, the average percent decline was smaller in red states, and some red states actually saw credit scores increase.

Here are some highlights of the CardRatings.com study, which provide insights into how household finances in different states have held up under the Obama administration.

Credit scores: red vs. blue

There are many indicators you can use to gauge economic health, but for general purposes, average credit score is a good catch-all barometer. CardRatings.com looked at credit score data from Experian to see how credit scores had changed over the past four years. By compiling this data state by state, and sorting that according to how those states voted in the 2008 presidential election, CardRatings.com was able to break out whose credit scores have done better over the past four years--households in red states or households in blue states.

The answer? In this tough economic environment, red state credit scores have held up better. On average, credit scores in blue states have declined by 0.58 percent over the past four years, compared with a 0.19 percent decline for credit scores in red states.

Despite blue states having a rougher time of it over the past four years, their average credit scores still exceed those in red states, 759 compared with 740. Higher credit scores can make debt burdens easier to bear, as credit cards for good credit tend to have lower interest rates than those for average or poor credit.

Debt levels: red vs. blue

Speaking of debt burdens, this was another area in which red states have done better than blue states over the past four years. According to Experian, households overall have reduced their debt burdens, but red states have succeeded in reducing theirs by a greater percentage. The average debt burden in red states dropped by 2.54 percent over the past four years, compared with 2.23 percent for blue states.

Blue states maintain slightly higher levels of debt overall, with an average household debt of $24,349, compared with $24,181 for red states.

Top 10 states that are better off

The nation's economic difficulties have had varying impacts in different parts of the country. In 10 states, average credit scores have actually improved over the past four years:

In keeping with the theme of Republicans doing better than Democrats under Obama, note that six of the 10 states in which credit scores improved voted for McCain in 2008.

Improving credit scores can be part of a beneficial cycle for households. Credit card offers for people with good credit are likely to feature lower interest rates, which in turn makes debt more manageable.

Top 10 states that declined the most

At the other end of the spectrum, here are the states whose average credit scores have declined the most under Obama:

Eight of the above states voted for Obama last time around. Their economic malaise could certainly hurt the sitting Democrat president's bid for re-election.

Weakening credit scores can make a bad financial situation worse. Credit cards for bad credit are likely to entail higher interest rates. These higher borrowing costs make debt more difficult to manage.

So, are you better off than you were four years ago? Ironically, you have a better chance of answering "yes" if you live in a red state. Will this affect your vote in 2012?

Note: Experian tracks data by metropolitan area, so CardRatings.com averaged these figures within each state to calculate statewide numbers. Figures were available for metro areas within 44 of 50 states, plus the District of Columbia. The most recent Experian credit ratings and debt figures from 2011 were used, and compared with Experian's data from four years earlier.

The original article can be found at CardRatings.com:Red states outscored blue under Obama