Consumers That Have No Credit Card Debt Have Lower Credit Score
Could this statement actually be true. Could consumers with no credit card debt have lower scores? The idea almost seems counter to the idea of many consumers of being in better off credit wise with no credit card. But the statistics found on credit karma show that is quite the opposite.
What they actually found is that consumers with no credit card debt usually fall into one of two categories.
- They don’t have credit card debt because they have poor credit. They have low credit for some reason which prevents them from using credit cards.
- They don’t use credit cards at all. This means scoring these individuals is tough because they don’t have a history to base their credit on
So what level of credit debt for the best credit score?
The article recommends having a debt to credit ratio below 35%. But the data shows the individuals with the highest scores had were in the 1% to 10% debt to credit ratios. Staying below 35%, might be the advice but it seems the lower the better.
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