Credit card debt is one of the most commonly reported reasons why individuals file for bankruptcy. Credit cards make it easy for users to lose track of how much they spend, causing them to accrue large debt balances. One reason for this is that credit cards can make an individual feel like he or she has more disposable income than he or she actually has.
There are a lot of myths and facts out there about credit, debt, and how to effectively manage your credit score. One of these is the myth that maintaining a balance on a credit card can help you raise your score faster than paying off the card each month. This simply is not true. If you have a credit card, you should make it a priority to pay its balance in full every month.
Your credit score is the three-digit number between 300 and 850 that provides a quick guide to your likelihood of repaying money that you borrow. There are three credit reporting agencies in the United States, which record your borrowing and payment actions to each calculate a score for you. These agencies are Experian, Equifax, and TransUnion. You are entitled to a free credit report from each of these agencies once every 12 months.