What is an indicator of poor credit management?

Paying only the minimum payment on debts is indeed an indicator of poor credit management because it suggests that the borrower is not making significant progress in reducing their overall debt burden. When someone consistently pays only the minimum, they can end up accruing high interest over time, leading to a longer repayment period and potentially larger total payments. This behavior may indicate that the individual is struggling financially and may not have a clear strategy for managing their debts effectively.

In contrast, regular monitoring of credit reports is a proactive measure that helps individuals stay informed about their credit status and identify any errors or potential issues before they become larger problems. Maintaining a diverse portfolio of loans typically reflects a balanced approach to credit, as it shows the borrower is managing different types of credit responsibly. Building a long credit history is advantageous as it demonstrates a track record of managing credit accounts responsibly, which can positively impact a credit score.