Myth: The less debt you have, the better your credit report
If a small amount of debt shows that you manage money responsibly, and boosts your credit score as a result, no debt is even better, right? Wrong. Staying out of debt is great for your financial well-being, but not so great for your credit rating, money saving experts agree. Basically, if you haven’t borrowed anything, you’re not providing any information for the credit bureau to score you on. Here’s how credit scoring works.
The better idea: Open a no-fee credit card and charge only what you can pay off each month. Or take out a car loan and stay on top of your payments.
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