Hawaii’s residents score high on credit

The economy and habitual saving put us in eighth place

Hawaii residents had the eighth-best personal credit scores in the nation in 2006, according to a recent comparison of nationwide credit scores by Equifax, one of the three major U.S. credit bureaus.

The average personal credit score of Hawaii residents was 715 in both 2006 and 2005 -- above the national average of 697. Credit scores range from 250 to 850.

How States Ranked States with highest credit scores in 2006 (the national average is 697.72): 1. Wisconsin 723.50 2. Minnesota 720.46 3. Vermont 719.55 4. Massachusetts 719.01 5. Connecticut 716.48 8. Hawaii (No. 8) 715.25 States with lowest credit scores in 2006: 47. Georgia 670.04 48. S. Carolina 669.91 49. Louisiana 666.58 50. Texas 666.33 51. Mississippi 657.52 * Credit scores range from 250 to 850 (a higher number being better)

Residents in Wisconsin, Minnesota and Vermont had the highest credit scores, while Louisiana, Texas and Mississippi residents had the lowest.

"The growth in the economy and growth in incomes here makes people able to shoulder relatively heavier debt loads, which explains why we would look pretty good compared to some other states," said Byron Gangnes, a University of Hawaii economist.

Hawaii residents also tend to save more than the national average, partially because of the high number of Asians in the state with a strong savings philosophy, said Pearl Imada Iboshi, the state's chief economist.

In addition, local banks and credit unions tend to be more conservative in granting credit, unlike more aggressive mainland lenders, which offer new flexible mortgage loans and higher credit limits in competing for business, said Wendy Burkholder, executive director of Consumer Credit Counseling Services of Hawaii.

"I like to keep my business local -- that is a strong sentiment here," she said. "We're kind of loyal to our local banks and credit unions, and they're much more conservative lenders."

But while Hawaii residents appear to be maintaining their debt payments, consumer debt is at an all-time high, Burkholder added.

Slightly more local residents -- 17 percent -- use more than half of their available credit than the national average at 14.3 percent, according to a recent study by Experian Consumer Direct.

"The problem with carrying a great deal of debt is even though you're making your payments on time, you're banking on the fact that your life is going to run smoothly for years to come," Burkholder said. "It only takes the loss of a job or a brush with a serious illness that will impact not only your income, but add medical debt to your already heavy load."