Jasz
VIP Contributor
Your personal balance sheet is a record of the money you owe and the money you have available. It's a snapshot of your financial health, showing which debts are high-interest and which ones are low. If you have too much debt and not enough cash, then your personal balance sheet will look bad.
The reason for this is simple: When you borrow money, it goes on your credit report. The more often you get into trouble paying those bills, the worse it looks on your credit report. So if all you can do is pay off one $10,000 loan after another, then that will look horrible on your personal balance sheet.
But here's the good news: You don't have to stay in debt forever to ruin your credit score! There are two ways out of debt: either pay off all your debts and stop borrowing new ones entirely - or keep paying down debt until your balances are zero (and stay there).
The reason for this is simple: When you borrow money, it goes on your credit report. The more often you get into trouble paying those bills, the worse it looks on your credit report. So if all you can do is pay off one $10,000 loan after another, then that will look horrible on your personal balance sheet.
But here's the good news: You don't have to stay in debt forever to ruin your credit score! There are two ways out of debt: either pay off all your debts and stop borrowing new ones entirely - or keep paying down debt until your balances are zero (and stay there).
