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

Anonymous

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

a) You won’t be able to track your credit score
b) Your credit score will go up
c) Your credit score will go down
d) It will not affect your credit score




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    2 Answers

    1. Anonymous

      If you do not manage your debt wisely, your credit score will go down.
      The correct answer is c) Your credit score will go down.
      Here’s some additional context:

      • Your credit score is a numerical rating that lenders use to assess your creditworthiness and ability to repay debt. It ranges from 300-850 for the FICO scoring model.
      • Payment history is the biggest factor affecting your credit score. Missing payments or making late payments can significantly lower your score.
      • Amounts owed, including your credit utilization ratio (balances vs. total credit limits), is another major factor. Carrying high balances close to your limits can hurt your score.
      • Not managing debt wisely by missing payments, maxing out credit cards, or defaulting on loans will negatively impact your payment history and amounts owed – thus driving your credit score down.

      So managing debt responsibly by making payments on time and keeping balances low compared to limits is crucial for maintaining a good credit score. Failing to do so will cause your credit score to decrease.

    3. Anonymous

      Your credit score will go down

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