What Will Happen to Your Credit Score if You Do Not Manage Your Debt Wisely?
Failure to manage debt wisely will lead to a decrease in your credit score, emphasizing the importance of responsible financial management.
by Sai V
Updated Oct 21, 2023
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What will happen to your credit score if you do not manage your debt wisely?
A) It will not affect your credit score
B) You won't be able to track your credit score
C) Your credit score will go down
D) Your credit score will go up
The correct answer is C) Your credit score will go down.
If you do not manage your debt wisely, such as making late payments, maxing out credit cards, or defaulting on loans, it can negatively impact your credit score. Responsible debt management, which includes making timely payments and keeping credit card balances low, is essential for maintaining a good credit score. Failure to manage your debt responsibly can lead to a decrease in your credit score over time.
What is a Credit Score?
A credit score, ranging from 300 to 850, assesses a person's creditworthiness based on factors like repayment history and types of loans. It guides lenders in approving loans and setting interest rates for financial products, shaping individuals' borrowing opportunities.
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