Tuesday Tips: The Relation Between Debt & Credit Score | Jerry Fetta

Have you ever wondered what the connection is between debt and credit scores? Jerry Fetta dives into this topic in a recent article titled “Tuesday Tips: The Relation Between Debt & Credit Score”. The article argues that your debt-to-credit ratio plays a significant role in determining your credit score.

Fetta points out that credit score is important for many reasons. It affects your ability to secure a loan, the interest rates on that loan, and even your ability to rent an apartment or get a job. Therefore, it’s crucial to have a good credit score.

The article explains that your debt-to-credit ratio is the amount you owe on your credit cards compared to the maximum amount you can borrow on those cards. For example, if you have a credit card with a $10,000 limit and you have a $2,000 balance, your debt-to-credit ratio is 20%.

The lower the debt-to-credit ratio, the better your credit score will be. Fetta recommends keeping your debt-to-credit ratio below 30%. He also suggests paying down your debts and asking for a credit limit increase to lower your ratio.

In addition to debt-to-credit ratio, Fetta notes that paying bills on time and having a diverse credit mix can also improve your credit score.

Overall, the article highlights the importance of understanding the connection between debt and credit scores. By keeping your debt-to-credit ratio low and paying bills on time, you can boost your credit score and improve your financial stability.