Can Credit Scores Predict Which Way Swing States Will Swing?

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Credit card debt"Can credit profiles predict which way a state will swing?"

That's the question posed in a new survey of voters' financial health just released by free credit-ratings site CreditSesame.com. In the survey, Credit Sesame compared voters' median credit scores, debt-to-income levels, mortgage sizes, and credit card usage across twelve 2012 battleground states.

Their conclusion? Despite what you might be hearing on the news today, seven of the 12 so-called "swing states" could be "in play" come November.

Political pundits expect Nevada, New Mexico, Wisconsin, Michigan, Iowa, New Hampshire, and Pennsylvania to vote for President Obama. But based on their financial profiles, Credit Sesame suggests these states may have a lot more in common with Governor Romney's supporters than with the President's.

North Carolina – another "swing state"– is already believed to favor Romney, and its financial metrics support what the pollsters are saying. Colorado, Florida, Ohio, and Virginia, on the other hand, are all true "toss ups," according to Credit Sesame.

What's Red and Blue with Numbers All Over?

Credit Sesame comes to this conclusion by way of comparing financial stats for the swing states to those prevalent in states that have historically favored Republican, or Democratic, candidates.

For example, your typical voter in a state expected to go for Obama has ...
  • a median credit score of 729
  • a debt-to-income level of 14%
  • and a mortgage valued at $187,450.
Moreover, voters residing in Obama/Blue states make use of about 16% of their available credit. In contrast, Red state voters are about twice as aggressive (32%) in exploiting credit card limits. Not coincidentally, they possess lower credit scores (677), and higher debt-to-income levels (18%), despite carrying smaller mortgages ($118,374).

Meet the Typical Voter

Now it's important to point out, for anyone reading this whose middle-school math vocabulary is perhaps a bit rusty, that Credit Sesame is looking at the typical voter here -- the "median" voter, or someone smack dab in the middle of the population, with half her state's voters scoring above her, and half below. That's as contrasted with the more common "mean" voter, a mathematical "average" man, created by adding up all a state's voters' credit scores, and dividing by the number of voters in the survey.

With that being understood, what do the data reveal? Here are a few surprises for you:
  • Almost half of the swing states, including four that pollsters expect will line up behind President Obama next month, sport low mortgage debt levels more typical of red states. Indeed, voters in these four states -- Pennsylvania, Iowa, Michigan, and Wisconsin -- actually carry mortgage debts smaller than those typically found among Romney voters.
  • Voters in a majority of the swing states -- New Hampshire, Virginia, Iowa, Florida, Colorado, New Mexico, and Nevada -- are financially stressed, with debt-to-income levels at or above the 18%-level typical of Romney voters.
  • All 12 of the swing states boast credit usage scores higher than the mean number typical in blue states.
"It's the Economy." Stupid?

So far, these three stats seem to argue in favor of Romney being able to come from behind, and snag a majority of the swing states' votes.

There is, however, one statistic on which the current President appears to have an edge in the race to become our next president as well: Credit scores.

Out of all 12 swing states surveyed, Credit Sesame finds that only one -- Nevada, home to the city (Vegas) with the highest home foreclosure rate in the country last year -- hosts a population with credit scores worse than the average for Red states. And while only a few of the swing states approach the high credit scores more common in "Obama Country," at least they're doing better than the typical Romney voter.

In short, if credit scores -- and the good feelings a shopper gets when applying for a card and discovering she has a good score -- are any guide, many of these voters might decide they really are "better off" voting for current president again. And if this is how things work out, the country could go for Obama in a landslide, with more than 90% of even the so-called swing states swinging his way.

On the other hand, if worries over maxed-out credit cards and high debt levels dominate, it's the pundits who could be in for a surprise come November 6.



Motley Fool contributor Rich Smith has no financial position in any company mentioned above.

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19 Comments

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jhon.jakson

My parents have recently taken out a reverse mortgage-At first I thought it was a horrible idea since we have had the home in our family now for many generations but after speaking to my lender they explained that my parents home be mine as long as I can pay off anything that the borrow.


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July 15 2013 at 3:59 PM Report abuse rate up rate down Reply
Jim Craigs

People with less money generally have better scores than the 1%ers

October 14 2012 at 9:02 PM Report abuse -2 rate up rate down Reply
toosmart4u

You must remember the vote you cast this election could affect your retirement checks when you retire. You must be able to think for yourself.

October 14 2012 at 5:52 PM Report abuse +4 rate up rate down Reply
kawieboy

Makes sense that Republicans would use more credit because they're used to paying for their stuff instead of having it handed to them.

October 14 2012 at 5:12 PM Report abuse +2 rate up rate down Reply
paddleman1928

I am confused-the democrats rail against the "rich" but they have better financial profiles than the republicans? Who are those "47%" then?

October 14 2012 at 2:20 PM Report abuse -1 rate up rate down Reply
lllcln

of course its the economy look how many business,s outscoursed jobs that were given tax breaks by the republicians.

October 14 2012 at 12:40 PM Report abuse -1 rate up rate down Reply
marine1942

It is the economy and we are NOT better off than before Barry took us. And he did take us down.
USA is broke.

October 14 2012 at 11:03 AM Report abuse rate up rate down Reply
Frankie

Conservatives, being under educated, will of course vote for Romney as they're too stupid to vote in their best interest.

October 14 2012 at 6:22 AM Report abuse +2 rate up rate down Reply
2 replies to Frankie's comment
Chris Smith

Liberals best interests include high unemployment, high gas prices, high debt, high food stamp participation?

October 14 2012 at 10:42 AM Report abuse -1 rate up rate down Reply
Mario Augusto

You consider a Socialist government to be in their best interest? Who is the stupidFrankie? I am a frst generaion Cuban who came to this country seeking political and economic freedom, you can take the Castro's communism or Chavez Socialism and compare to what will happen in the US under Obama. WAKE UP and look around the world, The US is the hope of civilization and freedom.

October 15 2012 at 9:30 AM Report abuse +1 rate up rate down Reply
kafienkarl

When it's negative about RED states its wrong or a lie. pathetic. LOOK at the top 10 non (TAX) filing states:
Texas, Alabama, Lousianna, Arkansas, New Mexico, Idaho, Georgia, South Carolina, Florida and Mississippi.
I see RED and plenty of the 47%. Absolutely everything is the fault of Democrats I doubt that very much. All I need to do is remember the Bush years to prove that to myself.

October 13 2012 at 6:28 PM Report abuse rate up rate down Reply
1 reply to kafienkarl's comment
kawieboy

And look at the states that have the highest taxes and are still bankrupt....California, New York, etc.

October 14 2012 at 5:16 PM Report abuse -2 rate up rate down Reply
inge wagner

Give it up, Obama will win

October 13 2012 at 2:20 PM Report abuse +1 rate up rate down Reply
1 reply to inge wagner's comment
coochiescooter

Myazz

October 13 2012 at 6:00 PM Report abuse -2 rate up rate down Reply