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Credit card debt: How a balance could affect one's credit score

Many individuals in Tennessee and elsewhere place a great deal of importance on building and maintaining a positive credit score. Some may employ a variety of methods when attempting to cultivate a healthy financial standing. However, one prevalent myth concerning the pursuit of a higher credit report could be leading some astray, and may instead be leading them toward issues with credit card debt.

Recent studies suggest that just over 20 percent of credit card users who took part in a recent survey admitted that they were attempting to build up their scores by carrying a constant balance on their credit cards. Payment history can play a part in determining one's credit, and making payments on time each month could help a person build a positive score. However, experts suggest that merely carrying a balance does little to affect one's score, and carrying a balance that approaches one's credit limit could actually hurt his or her credit.

There could be other dangers to carrying a constant balance. While a person may be able to make the required payments each month, unexpected expenses can arise at any moment and disrupt one's ability to meet financial obligations. Even one missed payment could lead to substantial amounts in late fees and an increase to annual percentage rates, and it may even lead to a negative report on one's credit score.

While credit cards could be a useful financial tool under certain circumstances, they can also be a source of financial hardships for many. Those who experience hardships due to overwhelming amounts of credit card debt may wish to pursue relief, and they could choose to consult with a bankruptcy attorney for advice on how to achieve this goal. An attorney can work with a client in Tennessee to form a strategy to reduce or eliminate debts in order to pursue financial stability.

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