A question of debt, and more debt

By Michelle Singletary
Sunday, June 27, 2010

While I'm away for a short vacation, I'd like to pass along some interesting questions -- and answers -- about debt from a recent online discussion.

I'd like to pay off a couple of credit cards. If I pay them off and carry a zero balance, will that have an adverse effect on my credit report? Or should I pay them off and then use them minimally and pay off the balance each month? I'm hoping to refinance my house before interest rates go up too much higher.

I get this question a lot, and it defies common sense.

Paying off credit card debt -- and staying out of debt -- is always a good thing. And no, you don't have to use the cards to boost your credit score. As I tell people over and over again, the No. 1 way to get a better credit score is to pay your bills on time, not by using credit.

My husband and I bought a home in October. He had substantial credit card debt in his name before we married. I had zero debt, and I have had one credit card in my name for the past two years. I attempted to get credit to purchase furniture and was denied. Is his credit affecting my ability to obtain credit?

I'm sorry, but you can't blame this on your hubby. The fact is his credit history did not migrate to your credit file when you married. His credit history stayed his, and yours, yours. It's probably the purchase of the home that led to your credit denial. Creditors have become a lot tougher on granting new credit. You just bought a home -- a big purchase and a big debt.

However, you should check your credit files. Have you paid any bills late? That could have resulted in your credit denial. Anyway, when it comes to couples and credit, your history only merges when you have debt together (i.e., the house).

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