Debt plays a significant role in shaping your credit score. While responsible debt management can help build good credit, excessive or mismanaged debt can lower your score, making it harder to secure loans, credit cards, or even housing. Understanding how debt impacts your credit score and how to fix it can help you regain financial stability.

How Debt Affects Your Credit Score

• Payment History (35%) – Late or missed payments can severely impact your score.
• Credit Utilization (30%) – Using too much of your available credit (above 30%) can lower your score.
• Length of Credit History (15%) – A longer credit history improves your score, but closing old accounts may hurt it.
• Credit Mix (10%) – Having different types of credit, like credit cards and loans, can boost your score.
• New Credit Inquiries (10%) – Applying for too many credit accounts in a short period can lower your score.

Steps to Fix Your Credit Score

• Make Payments on Time – Set up reminders or automatic payments to ensure you never miss a due date.
• Lower Your Credit Utilization – Aim to keep your credit card balances below 30% of your credit limit.
• Pay Down High-Interest Debt – Focus on paying off debts with high interest to reduce overall financial strain.
• Avoid Opening Too Many New Accounts – Frequent credit applications can temporarily lower your score.
• Check Your Credit Report Regularly – Look for errors or fraudulent activity and dispute inaccuracies with credit bureaus.

Debt doesn’t have to control your financial future. By understanding its impact on your credit score and taking steps to manage it wisely, you can improve your credit health, reduce financial stress, and work toward better financial opportunities.