How does debt affect your credit?

Does debt affect your credit?

Absolutely.

How important is that?

Extremely. You all know that your credit affects the rates you'll receive when you get a mortgage or apply for consumer credit. But you also need to understand the your credit will be looked at by future employers who will use it to help them decide whether or not  to hire you. Your insurance company could base your rates on your credit. Potential land lords will decide whether to rent to you based on your credit. And bad credit can follow you for years.

Your credit is becoming more and more important every day. So we're going to look at how credit works and how your debt can affect your credit.

We'll also look at how some of the changes to the economic landscape are affecting your credit without you knowing it.

To start with, let's look at the credit card crunch.