Consumer debt: credit card, personal loan, auto loan, student loan
Consumer debt pulls your Margin Score down—the Debt Friction Drag pillar counts what you owe and your payments relative to income. Here’s how to avoid or minimize each type and how they affect your score. For payoff timelines and interest, use our debt payoff calculator.
Credit card debt
Credit cards are one of the costliest debts—APRs often 18–25%+. Pay in full every month. If you carry a balance: stop adding charges, put the card away, and throw every spare dollar at the highest-APR card first (avalanche). Consider a 0% balance transfer only if you can pay off before the promo ends.
Debt payoff calculator → See payoff time and interest. Check your Margin Score to see how your debt affects you.
Personal loan debt
Personal loans are unsecured—no car or house backing them. Avoid for wants (vacations, weddings); use sinking funds instead. Use for consolidation only if it lowers the rate and you stop borrowing. Shop rate and term; shorter term = less interest.
Debt payoff calculator → Compare strategies. See your Margin Score.
Auto loan debt
How you borrow for a car matters: down payment, term, and whether you buy or lease. Put 20%+ down when you can, keep the term to 4 years or less. Compare car decisions (lease vs buy, new vs used)—a smaller loan and lower payment leave more margin and lift your score.
Car decisions → Lease vs buy, new vs used. Margin Score.
Student loan debt
Borrow only what you need; federal before private. After graduation, pick a repayment plan that fits your income and pay more than the minimum when you can. Check eligibility for forgiveness or relief (PSLF, income-driven plans). Don’t let student debt stop you from building an emergency fund—a small buffer reduces the need to add more debt.
Debt payoff calculator → See payoff time. Margin Score.
How debt affects your score: The Debt Friction Drag pillar counts personal debt and payments relative to your income. The more you owe and the higher the payments, the more it pulls your score down. Paying off debt frees margin and lifts the score. Run your numbers on the Margin Score and debt payoff pages.