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

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

A) Your credit score will go down

B) It will not affect your credit score

C) Your credit score will go up

D) You won’t be able to track your credit score

Answer – A) Your credit score will go down.

The missed payments, late payments or the default on loans can have a significant impact on the credit scores of individuals. The negative impact on the credit score can be reduced by ensuring that the outstanding loans and debts are properly cleared by an individual. The lack of proper and wise management of the debts can thereby lead to decrease of the credit score as the payment history is considered to be a highly significant factor that can determine the credit score. The late payments of debts are considered to be the most prevalent issues that lower down the credit scores of individuals. Late payments of the loans, credit card dues and the other bills can result in the lowering down of credit scores which in turn influences the financial health of an individual. The high utilization of credit across the credit cards of individuals can also lead to a major negative impact on the credit score. The individuals can face issues related to reduction of the credit score due to the presence of high total balances which can lead to suffering of the credit scores. The poor management of debt and low credit scores can also reduce the access that can be provided to the individuals based on borrowing money and gaining new credit. The reduction of negative influence on the credit score is possible by the reducing the debts that have been taken by the individuals. The reason behind the rejection of the second option “B) It will not affect your credit score” is that the lack of wise management of debts has a major negative influence on the credit scores of individuals. The third option “C) Your credit score will go up” is that the lack of proper debt management can never result in increasing of the credit score as this has a negative influence on the score. The fourth option “D) You won’t be able to track your credit score” has been rejected as an answer to the question as the tracking of credit score is possible and this can help in wise debt management.