When it comes to their credit many people wonder does credit card debt affect my credit score? The answer to the question is yes your current amount of debt will either help or hurt your credit scores and we will examine this in the article below.
When the computers at the bureaus are taking your data and compiling it into your consumer credit score they are generally taking into account three major factors.
Amount Of Debt Used- They will be looking at how much of your current available credit you have used.
Anytime you start using over 50% of your available accounts your FICO scores will start to decrease rather quickly.
To get around this many people will get a credit line increase in order to drop the balance to limit ratios below 50%.
Payment History- This is self explanatory, if you pay your bills on time every month your scores will be much higher then someone who always pays late.
A late payment is one that is 30 days late or more.
If you happen to pay a few days past the due date the only thing that will happen is you will have to pay a late fee with the lender.
Amount Of Accounts- How many accounts you have open and how long they have been open will greatly affect your credit score.
Generally if you have 3-5 accounts you are in good shape but any more then that and your risk factor increases and your FICO score will go down.