What is my outstanding debt?

Outstanding debt is debt you owe to a creditor or multiple creditors. Outstanding debt can be on a credit card, personal loan, car loan, student loan, or even other types of balances including tax debt. Your debt is considered outstanding until the balance (the amount you owe) is fully paid off.

Why does outstanding debt matter?

The total debt outstanding listed on your credit report impacts your financial stability. While debt isn’t inherently good or bad, debt can create problems if you’re not using it advantageously.

When calculating your credit score, credit bureaus evaluate the amount of debt you’ve used compared to your overall credit limits. If the amount of debt you owe is close to your credit limit, that is likely to have a negative effect on your score. Keep credit card balances low and try not to max out your credit cards in order to keep your credit score high.

Credit bureaus also look at how many times you’ve missed payments, which is why on-time payments are important when you have outstanding debt. If you have too many missed payments, your debt may be sent to a debt collection agency and a debt collector may contact you.

Last, debt has interest fees. When you carry a balance of any type of outstanding debt, whether credit card debt or debt from personal loans, you may pay a high price over time. High-interest debt can be very costly, which is why you should have a plan to pay off debt and only use debt to pay for purchases expected to benefit your life more than they cost you.