The first step in finding the most effective debt help is to understand the relationship between the debt you're carrying and your credit score. Both how much you have in debt and how you manage it figure into its bearing on your credit. To shed more light on this issue and provide some additional debt help and clarification, below is a rundown of three ways your outstanding balances can affect your credit score.

3 Ways Debt Affects Credit

1. The Higher the Debt, the Bigger the Impact

Your debts account for 30% of your total credit score. The higher the amount of debt a person carries in relation to their credit limit, the stronger the impact it has on the person's credit rating. For example, a debtor with a $12,000 debt and a $13,000 credit limit will see more of an effect on their credit score than a debtor with $2,000 in debt and a $6,000 credit limit.

2. High Credit Scores Are More Easily Damaged by Debt

One might assume that if they have a higher credit score, they have a wider berth to carry more debt. But this simply isn't so; in fact, higher credit scores will almost always take a harder hit than lower ones when it comes to debt. Let's say, for instance, you max out a credit card. A person with a credit score of 680 will lose anywhere from 10 to 30 points, while a person with a credit score of 780 will lose 25 to 45 points.

3. Late Payments Are Extremely Destructive to Credit Scores

A line of credit is essentially a contract between the lender and the debtor, and the debtor has a responsibility to pay a minimum amount each month. Even missing one month of payment can cause a credit score to plummet. For example, a person with a 680 score who is 30 days late making a credit card payment will see their total drop by 60 to 80 points. A person with a 780 score who is 30 days late will see, on average, a 90- to 110-point drop. If you can't keep up with minimum monthly payments, consider it a red flag that it's time to seek debt help.

By recognizing the interplay between debt load and credit, you can better identify those balances that need to be addressed right away. For people with debts that can't be realistically paid off or lessened anytime soon, professional debt help may be in order. The Law Office of James B. Mallory III has been providing debt relief solutions to Iredell County, North Carolina, for nearly three decades; Attorney Mallory offers representation in Chapter 7 and Chapter 13 bankruptcies, foreclosures, wage garnishments, and debt lawsuits. Schedule a consultation by calling (704) 872-1911 or visiting his website today.