Is It Possible To Have Good Credit And A Bad Credit Score?

Building a good credit score is complicated. Maybe not astrophysics complicated, but confusing enough. In some cases, people who pay their bills on time or early end up with a lower credit score than they might expect. How can that be? Have a look below.

Here are some of the factors that can go into determining a credit score.

Payment History (35%)
Debt Load (30%)
Length of credit lines (15%)
Account Diversity (10%)
Number of times credit report pulled in last 12 months (10%)

Most people believe that good credit is based solely on making payments on time. As you can see, it only accounts for 35% of your score. If you have a lot of debt, your score will still suffer. The same is true if you make payments on time, have low debt loads, but only have credit cards, or car loans. You need to have both on your report in order to raise your credit score.

Many debt gurus will preach low debt or on time payments without taking a holistic look. The truth is that you must address all five of the above categories or you could have a good credit, but a bad credit score.

By: Carleton Wheaton

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Carleton Wheaton is a freelance writer who covers automotive and financial topics. If you have not yet established any credit, you might want to start; after all, it is very tough to secure a used car loan no credit.