Good debt and bad debt are terms used to distinguish between different types of debt and their effects on your financial health. Good debt is debt that increases your income or net worth, can be paid back responsibly, and has a positive return on investment. Bad debt, on the other hand, is debt that cannot be paid, does not provide a return on investment, and has a negative effect on your credit.

It can be hard to completely avoid getting into debt when making big investments. However, it is essential to choose debts that will improve your credit rating instead of harm it. Additionally, it is important to decide if debt will help you reach your financial goals or hold you back. This article looks at the difference between good and bad debt, and provides advice on how to manage debt to better your financial wellbeing.

To determine if a debt is “good,” ask

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