My friend told me that having a high debt on anything on my credit would hurt me. I just got a new car. Is the fact that the balance due is high going to hurt my credit?

Q:  My friend told me that having a high debt on anything on my credit would hurt me.  I just got a new car. Is the fact that the balance due is high going to hurt my credit?

A:  It is REVOLVING CREDIT accounts that decrease credit scores if balances are high.   A car lease or loan is considered installment credit so the balance to limit ratio’s will have very little effect on the credit scores.  Revolving credit accounts are credit cards, overdraft on checking accounts, lines of credit, and sometimes home equity loans.

Filed Under: Credit