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Study Highlights Differences Between Those with High and Low Credit Scores

by Peter Andrew

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Study

Highlights Differences Between Those with High and Low Credit

Scores

High scorers charge more, but are more likely to pay on time

A new study from credit reporting agency Experian shows that

consumers with high credit scores are actually more likely to

carry high debt than those with low credit scores. However,

these high scorers got their scores by using a smaller percentage

of their total available credit and by making payments on time.

The

Experian study compared consumers scoring less than 660 against

those scoring 720 or greater, using their debt numbers and payment

behaviors over the past six months as a guide. Those with high

credit scores had over $15,000 in debt and made payments of

over $700 per month, versus over $6,600 in debts and monthly

payments of $291 for those with lower scores.

However,

despite the higher debt and payments, those with higher scores

were only using about 18% of the total credit available to them,

while those with lower scores were using about 28% of the credit

available to them.

Perhaps

the most glaring difference -- and the one most likely to hurt

credit scores -- was in late payments. Those with lower credit

scores made 2.3 late payments in the six-month period. On the

other hand, the high scorers averaged just 0.2 late payments.

 

Published 02/01/06 (Modified 07/08/14)


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