Too much debt? Why you need to lower your debt NOW.

Ladies, a certain amount of debt is acceptable.

In fact, a certain amount helps you have good credit, meaning a high credit score.

This credit score will open doors for you if you want to join a nonprofit board, get a high clearance job or simply get a mortgage for a home or loan to begin a business.

A low score is like a padlock on the doors to those opportunities, and the key is lost until you lower that debt.

Many women (or men for that matter) do not know that magic space between a healthy versus unhealthy credit score or, debt.

Your debt is measured against your available cash and assets and utilization, or how much you use the credit. This might be credit cards, mortgages, loans, and payment plans. For credit cards, it is the cash available on the card, how much you use the card, and if you have late payments as well. The more you use the card, the more it looks like you depend upon it meaning, you don’t have the income or assets in which to support your lifestyle or financial obligations.

Having a credit card with a limit of $8,000 is not bad, but having it maxed out, is. The person with a $2000 limit but is only using 10-20% of that card might have much better credit than you, a higher score, and more opportunities because they are showing inquiries that they do not depend upon the credit.

Every single penny of debt that you owe makes you a risk factor.

There are different types of debt and some are better than others to address, which we will address soon.

For now, a “to-do” is to make a list of your outstanding debt and list how much of it is credit cards or payment plans, and look at what you are using vs how much is available. Develop an idea of how much you are depending upon your credit cards.

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