Is there really such a thing as good debt ?

Yes there is, if you think about it, without having good debts we wouldn't ever be able to improve our credit score would we ?

So what constitues good debts ?   Well things like a mortgage is a good debt, because at the end of it you would own your property.  Good debt can also include things like credit cards, provided they are being paid off in full on a reulgar basis and not attracting too much interest or any late payment charges.

In actual fact any debt which you can manage to pay off could be identified as a good debt.   This is because every time you make a payment on time, for the correct amount yor credit file gets updated positively and your credit score will rise as you have been proven to be a good payer.

So it follows that any debts you have that you are not paying regularly, on time and for the contractrual amount are considered as bad debts.

Also, other bad debts are those that you are paying extremely high interest rates.  For example, these could be payday loans, where the rates of interest can be up to 400%, also debts where you are consistently missing the payment date or correct payment amount.   These debts will destroy your credit rating as each time a payment is missed or a short payment made, then your file will be updated with a red flag.    The knock on effect of this will see your credit score plummet.

The best way to maintain a good credit file is to pay all your debts on time each month at the rate agreed with your lender.