Rising debt levels come at a time when Americans have more access to their credit reports and better credit scores.
The national average FICO score is now 695—the highest it's been for at least a decade, according to the latest analysis from Fair Isaac Corp., which created the score. A separate analysis by Experian put the average VantageScore, which was developed by Experian and the other national credit reporting companies Equifax and TransUnion, at 667, which is still considered good. (Both scores range from 301 to 850.)
You can get free credit scores from websites such as Quizzle, Credit.com and Credit Karma, which may draw on your credit information from one or more of the three major credit bureaus and offer resources to help you improve your score. Some credit card issuers, including American Express, Bank of America, Chase, Citi and Discover, now provide customers with access to their FICO credit score for free too.
Yet major misunderstandings about credit cards persist. A new survey by Bankrate.com found 77 percent of Americans don't know that accounts with high outstanding balances hurt their credit scores, even if they pay the bills on time, and 55 percent said that carrying a balance can improve their credit scores.
"I was surprised that these misconceptions exist because credit scores and credit reports are now widely available," said Jeanine Skowronski, a credit card analyst at Bankrate.