By: Kim Soyung

Having personal debt is not necessarily a bad thing.  However there is good debt, and there is bad debt.  Good debt includes student loan debt and a house mortgage.  Bad debt includes any type of credit card debt.  Student loan and mortgage debt are good debt to have because they have value to them; your college education can land you a good-paying job, and your house will always have price tag on it.  However when it comes to credit card debt, the only price tag on credit card debt is a negative price tag.

Good debt in inevitable-you will most likely have to pay for college in one form or another and chances are you will be a homeowner one day.  Bad debt is by choice.  It is good to have balances on credit cards in order to build credit, but just remember to pay the cards off every month.

Personal debt ultimately helps your credit score when the majority of your debt includes student loans and a mortgage.  However the more credit card debt you have, the more bad debt you incur.