Study Highlights Differences Between Those with High and Low Credit Scores
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Highlights Differences Between Those with High and Low Credit
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.
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.
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.
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.
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