HOUSTON – In a report conducted by WalletHub, Texas was revealed to be the number one state in financial distress in the country.

PREVIOUS: Texas named most financially distressed state in America, report says

This would be the second time Texas made the top list after doing so previously in 2024. The figure was established through a survey that asked residents about various metrics, from credit scores to bankruptcy filings.

“Texas is the state experiencing the most financial distress,” said Chip Lupo, an analyst at WalletHub. “(This) is demonstrated by the fact that residents had the ninth-lowest average credit score in the country in Q1 2025.”

It isn’t just a low average credit score that is causing Texas to fare so badly in reports. There are a variety of other metrics where Texas falters when compared to other states.

“Texas also had the third-highest number of accounts in forbearance or with deferred payments per person,” Lupo said. “And, Texas has the seventh-highest share of people with these distressed accounts, at 7.1%.”

Additionally, Texas ranked 6th in the change in number of bankruptcy filings, revealing that financial distress experienced by residents can often result in a drastic outcome. But why are these metrics so important to measure, and what can we take away from the results?

Experts say that reports on fiscal distress can shed light on weak points within a state and point out areas that are in need of improvement.

“Measuring the share of residents in financial distress is a good way to take the pulse of a state and see whether people are generally thriving or having trouble making ends meet,” Lupo said. “When you combine data about people delaying payments with other metrics like bankruptcy filings and credit score changes, it paints a good picture of the overall economic trends of a state.”

Check out the full report by WalletHub by clicking here.