What will happen to your credit score if you do not manage your debt wisely?

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  • July 3, 2023 at 7:43 pm #8562
    StellarFi
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    July 5, 2023 at 7:44 pm #8763
    Team StellarFi
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    Debt is an important factor in both beginning and managing credit. Your credit journey begins when you first apply for a credit card, make a purchase, and pay off the credit card debt every month.

    The major factors that impact your credit scores, whether it is FICO® or VantageScore® are total credit usage, balance, and available credit, credit mix and experience, payment history, and amounts owed. All these factors put together make up a majority of your credit score. 65% of the FICO score factors are highly influential factors on your VantageScore.

    Managing credit involves paying your loan installments and credit card balances on time. Apart from this, keep your credit utilization below 30% and diversify your credit mix. Maxing out your credit card, having only one type of credit account, and/or not paying your credit card bills on time lowers your credit score significantly.

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StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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Credit score increase based on StellarFi members’ data. Credit score increase not guaranteed. Credit scores will only be available to members whom we are able to validate. On-time payment history can have a positive impact on your credit score. Nonpayment may negatively impact your credit score. Failure to make monthly minimum payments by the due date each month may result in delinquent reporting to credit bureaus, which may negatively impact your credit score..