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My Money - Good debt vs. bad debt

Is there a difference in the type of debt you occur?

Posted: Dec 3, 2018 3:02 PM
Updated: Nov 19, 2019 9:37 AM

Brooks Boie of Rochester, MN wants to know, “Is debt always bad? Or is there good debt and bad debt?”

Mark Hettinger, COO at First Alliance Credit Union, answered this question by explaining the differences between good and bad debt:

  • Good debt means you’re in control of it and it is affordable and manageable
  • Bad debt means you can’t afford your obligation and can’t make your payments
  • Good debt helps improve your credit score, bad debt hurts your credit score
  • Stay away from debts that will stress your budget

Learn more about debt management: https://www.firstalliancecu.com/blog/good-debt-vs.-bad-debt

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