Host: Is paying credit cards more important than installment loans or mortgages?
Markita Aldridge-Woods: Well, that s like a double-edged sword there, I mean the things that actually impact the credit score, 35% is your payment history. Do you pay on time? What happens is, with credit cards and mortgage loans or car loans, it is actually more important to pay those revolving credit cards on time versus the other accounts and the reason being is those accounts are tied to some type of security. A mortgage is typically tied to a home; a car loan is tied to a car. So eventually if you don t pay, what's going to happen? They are going to come and get those things or repossess them and take them back into possession of the bank. However, with credit cards, it takes a more diligence to actually pay those things on time and it has more weight in the scoring model. So it is going to hurt you if you don t for your credit cards on time because after you ve charged your new shoes or boots or whatever, there is no way that those things can be taken back. So, it takes more to make sure that you make those payments that even though they have a lesser consequence, they have a bigger consequence in payment history.