Nov
16

Is All Debt Created Equal?

November 16, 2013

Prepare for Chicago mortgage debtHave you heard the terms “good credit” and “bad credit?” Do you know people who live extravagant lifestyles but are on a limited income or others who carry a large debt like a Chicago mortgage but pay for everything else with cash?  Both people have debt; are they looked at in the same way by lenders? The credit experts at the Equifax Finance blog explain it all in the recent article, “

Your Credit Score: Good Debt vs. Bad Debt.”

In the eyes of lenders, not all debt is created equal. Certain debts are deemed good debts while others are considered not-so-good. You can probably guess which kind of debt is the bad kind. It’s the kind of debt used to fund a lavish lifestyle that someone cannot afford; like using a credit card to pay for entertainment, clothing or vacations and not making the monthly payments on those debts. When debt of any kind racks up, it’s not good; but it is especially difficult for those who carry high-interest credit cards and find it hard to not even make the monthly minimums, much less pay the balance each month in full. Good credit, on the other hand, is the type of credit that is used to finance an investment. Mortgage debt is considered good debt, as the value of your home should go up over time. Student loan debt is also generally considered good debt, since you’ll be able to use your college degree to (hopefully) secure a well-paying career that will set you up for financial success.

If you want to boost your

credit score, you can’t do it immediately, but you can take slow and steady steps to get your credit in better shape: be a responsible user of credit, pay as much as you can on your debt each month and pay it on time. Eventually, these positive steps will help turn your credit around. Get more credit advice as well as advice on other personal finance topics like retirement, identity theft, taxes and insurance, on the Equifax Finance blog.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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