 TITLE: How to Manage Your Debt CONTENT: Avoid Common Credit Mistakes\n----------------------------\nThese habits can make debt more of a strain, and can prevent your credit score from benefiting from the debt you've decided to take on.\n*   **Making only the minimum credit card payment:** While paying the minimum balance every month will prevent a missed or late payment, it can be a recipe for a ballooning credit card balance. Make the minimum payment only during months when your budget truly has no room to stretch; otherwise, always consider the full outstanding balance the ideal amount to pay off each month.\n*   **Closing credit cards you rarely use:** If a credit card comes with a high annual fee that you can no longer afford, closing the account could be a good idea. In nearly all other cases, your credit score will be stronger if you have a long credit history and a higher overall credit limit (assuming you use only a small proportion of it). Consider keeping your oldest cards open and making occasional charges to keep them active and prevent credit limit reductions or account closure.\n*   **Assuming paying off an installment loan will improve credit:** You likely won't see an immediate improvement in your credit score when you pay off a mortgage, car loan, student loan or personal loan—even if the loan is paid in full earlier than required. The loan will be \"closed\" on your credit report, and all of that loan's positive payment history will no longer figure as significantly into your credit score. It may give you peace of mind to pay off a loan early, but the credit score impact shouldn't be the top reason you do so.\nManaging your debt so you get the most benefit from your loans and credit cards involves being aware of exactly how much debt you have and keeping balances low—particularly with credit cards—so you don't find yourself taking on more debt than you can comfortably afford. Simply knowing how much you owe and paying as much as you can toward your debt can help you reach your financial goals sooner rather than later. If you're worried your debt has already gotten out of hand, consider enlisting the assistance of a certified credit counselor, who can offer advice and more to help you bring your debt back under control. END