The states where people are most and least diligent with credit

Credit scores are supposed to be a way to size up your financial responsibility. But in practice, they often incentivize people to take on debt and can be riddled with errors. Studies show scoring disadvantages people of color, and many people are shut out of the system altogether. 

Tamara Nopper, an associate professor of sociology at Rhode Island College, said within the current system, our economy is "built on taking out loans and taking on debt to meet basic human needs like housing, health care and higher education.”

No matter your thoughts, your credit score still matters, whether your landlord wants to check your credit before you sign a lease or you need to finance a car purchase. Even if you don’t like the system, most people can’t afford to opt out of it. 

Chip Lupo, an analyst at WalletHub, encourages people to be diligent with their credit to avoid the adverse effects of the system.

"True diligence also includes monitoring your credit reports regularly to make sure there are no inaccuracies and swiftly reporting anything that’s out of place,” Lupo said. "Mistakes on your credit report can unfairly hurt your credit score.”

WalletHub ran the numbers to see where people are the best — and worst — with credit. Continue reading to see the top and bottom 5 states.

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Hawaii ranked fifth in part because it leads the nation with the lowest percentage of collections and foreclosures, meaning its residents have a particularly low level of financial distress compared to other states, WalletHub said.

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Alaska have strong long-term credit management, with the third-lowest rate of active bankruptcies and fourth-lowest foreclosure rate, WalletHub said.

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Vermont claimed the third spot with second-lowest bankruptcy rate. It's also in the top five for low missed payments and collections.

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With the lowest share of residents with missed payments, Iowa came in second place. WalletHub said it also has very low rates of collections and bankruptcies.

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Massachusetts ranked first thank to its low rates of collections, missed payments, and foreclosures.

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Kentucky ranked fifth with low scores across the board, as residents show signs of struggling with long-term financial planning.

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WalletHub said Mississippi has the worst missed payment rate in the country and poor ranking in other areas that landed it in fourth-to-last place.

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Alabama suffer from high rates of missed payments and bankruptcies, which is why the state took the third-to-last spot, WalletHub said.

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Louisiana has similar problems to Alabama, with high rates of missed payments and bankruptcies, securing it second-to-last place.

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Arkansas ranks last with the highest percentage of people with accounts in collections and foreclosures.