Cash loans and other loans that are tied to an account holder’s creditworthiness are not a surefire way to help your credit score, a new study from Experian and Experian’s Financial Adviser suggests.
Experian and the National Association of Consumer Financial Advisors (NAFAC) are partnering to explore the impact of different types of loans, including car loans and payday loans.
In the study, the researchers looked at 534,000 consumers in the United States and found that only a fraction of these borrowers were on a cash or credit card line.
The majority of these consumers had an existing line of credit and were looking for a new loan.
Experian says that in the U.S., the average amount of credit card debt per borrower is about $1,400, and the average consumer has about $2,000 in credit card balances.
Experians researchers said that about one in five consumers are on a loan or other type of line of financial debt.
The study also found that borrowers who had the most credit card loans were more likely to have had a higher credit score than those with the least credit card accounts.
The researchers said this was because they typically borrowed more from a lender with higher fees, and those borrowers with more credit card debts tended to have lower scores.
Experian, which is part of Experian Group, is a division of Wells Fargo.
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