What Will Happen to Your Credit Score if You Do Not Manage Your Debt Wisely?
If you don't manage your debt wisely, your credit score will go down, affecting your financial opportunities and stability.
by Sai V
Published Oct 19, 2023 | Updated Oct 19, 2023 | ๐ 1 min read
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What Will Happen to Your Credit Score if You Do Not Manage Your Debt Wisely?
a) Your credit score will go up
b) You won't be able to track your credit score
c) Your credit score will go down
d) It will not affect your credit score
The correct answer is: c) Your credit score will go down
If you do not manage your debt wisely by missing payments, carrying high credit card balances, defaulting on loans, or having accounts sent to collections, your credit score will be negatively impacted. These actions indicate financial instability and a higher risk for lenders, leading to a decrease in your credit score. A lower credit score can make it harder to qualify for loans, credit cards, or favorable interest rates in the future. It can also affect your ability to rent a home, secure insurance, or even get a job in some cases. Managing your debt responsibly is crucial to maintaining a good credit score and financial well-being.
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