Credit & Debt

Your credit score is far more important than most grades you can get on a test. Like your permanent record, it will follow you for many years. In fact, many employers look at an applicant’s credit record before making hiring decisions. Some insurance companies look at credit ratings when setting premiums.

An important factor in calculating credit scores is the amount of your credit card balances in comparison to your credit card limits. This is called the credit use ratio. If you owe less than 30% of the combined limits on all of your credit cards, your score is likely to be higher. It is also imperative that you pay your bills by the due date, even if there is a grace period.

Applying for new credit cards may adversely affect your credit score, even if you never use them. The new credit cards will reduce your average account age. A low average account age can bring your credit score down, so you may benefit by keeping your current cards and use them responsibly.

Here’s how to get your credit card debt under control:

Paying off your credit card debt in full each month is one of the best investments you can make since credit card interest may be as high as 18 to 24% and there are no secure investments that will pay anywhere near that type of return.