Debt is an obligation that can help pay for purchases, such as a home or higher education expenses, at a later date. Debts can be split up into four categories: secured, unsecured, revolving, and installment.
An excessive amount of debt can not only be financially stressful, but it can also negatively impact a person's credit rating. Your debt will affect your credit-utilization ratio, which is the amount of money you owe compared with the total amount of available credit.
No matter what type of debt you have, it’s important to make on-time payments to stay on good terms with your creditors.