Learn about Credit

Is Your Credit Score Worse Than You Think?

Myth: "I've got excellent credit because I pay all my debts on time." Many factors can drastically lower your credit score even though you always pay on time.

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Just because you pay all of your debts on time doesn’t mean that you will automatically have an excellent credit rating. Your credit rating is determined by much more than just paying bills on time. Paying all of your debts by their due date is extremely important. However, a perfect payment history won’t keep your credit rating above water if you take your credit to extremes—like maintaining high credit balances.

There are many factors that can negatively impact your credit rating. Here are a few:

High credit card balances
How high are your credit balances? Maintaining high credit balances may be interpreted by the credit scoring system as a sign of financial difficulty and reduce your credit score even though your payment history is spotless.

Frequently applying for credit
How many times have you applied for new credit in the past few years? A lot of new credit applications can reduce your credit rating.

Old, unpaid parking tickets
Do you have any outstanding parking tickets? If you have tried to forget about some old parking tickets, they may not have forgotten about you. Outstanding collections can appear on your credit report and negatively impact your credit rating.