Credit Card Debt and How it Affects Your Credit Score

Many people tend to be in the dark on how credit card debt actually affects your credit score. Some are under the impression that it's 100 percent negative while others swear by it as the only way to build up their score. I can tell you that these types of revolving credit are a double-edged sword in that if maintained properly they can really help to build it, however letting your Visa or Mastercard get out of hand can really put a damper on your scoring.

The main things you want to avoid are the following:

1. Keep your available credit at 50% or more.

The more of your credited amount that you are using the more it will take away from your credit score. A good rule of thumb is to keep 50% or less on the card at any given time. The less obviously being the the better.

2. Never close a long standing credit card.

I know the first thing you may want to do after paying off a mountain of debt is to just cancel the account and be done with it. Think about this though before you do it. If it's a long standing line of credit and you decide to close it, that history stops right there. This can impact your credit score almost immediately and will alter it for time to come.

If you can follow these two tips, you will be well on your way to driving up your score and keeping it at an extremely favorable range that will look attractive to many lenders.