Tips for handling credit wisely

Experian, one of the top-three credit-reporting companies in the nation, released a study exploring how baby boomers in Arizona and across the nation depend on credit compared with other age groups. It found that millennials struggle the most with debt and managing their money.

The fourth annual study considered credit scores, how many credit cards each age group had, late payments and how much debt the cards carry. The generations were grouped in age brackets from 19 to 29, 30 to 46, 47 to 65 and over 65. Across the nation, Americans carried an average credit card debt of $27,887. They averaged just over two bank cards each with a mean balance of $4,501 per card. With a possible range of 300 to 850, the average credit score in the nation was 681.

In addition to collecting data on how people manage their credit, the study suggested a number of ways to improve credit scores. Even small steps will help people obtain a better credit score. Paying bills when they are due and bringing delinquent accounts current will usually help. Someone who needs to establish credit can open an account, use it and pay it off quickly. A credit score is improved with older accounts. These should generally not be closed. Mixing types of credits, such as a vehicle loan, department store cards and credit cards, helps. Don't let the balance on credit cards climb too high. If someone has three credit cards, they should spread the balance out between them instead of leaving one with a zero balance.

When credit overwhelms people, debt collectors might begin to harass them and call at all hours of the day. A bankruptcy lawyer could assist clients as they decide if they should file for bankruptcy.

Source: Daily Finance, "Credit's Generation Gap: How's Your Age Group Doing on Debt?", Michele Lerner , January 29, 2014

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