Low Debt, Low Credit Scores in Alabama

There are a lot of misconceptions about credit scores and debt. Many consumers believe wrongly that if they don't have any debt, they don't have to worry about their credit score. To disprove this notion, consumers only need to take a look at the great state of Alabama.

According to a study from CreditKarma, Alabama has the fifth lowest average amount of debt statewide. Many consumers would assume that Alabama's average credit score is pretty high, but they would be wrong. Alabama actually has the fourth lowest average credit score statewide, coming in with an average score of 642.

Credit scores are meant to gauge the risk of lending to a consumer, and debt does play a role, though not in the way some people think. In order to have a good credit score, I need to have a strong credit history. I have to borrow money whether by a loan or by using my credit card, and then I have to show that I can repay that money. Debt starts to play a role when it comes to credit utilization. For example, if I have a credit card, I only want to use a small fraction of my credit limit, and I don't want to carry a large balance from month to month.

The trick is to use your credit card enough to establish a good credit history but not too much to rack up debt. Alabama is doing pretty well staying away from debt, but by being credit-shy, they are hurting themselves later if they want to buy a car or get a loan.

To learn more about responsible credit card use, check out http://blog.mycreditspecialist.com, and go to http://www.mycreditspecialist.com to sign up for a free credit evaluation today.