Making Minimum Payments Doesn’t Mean You Have Good Credit

July 19, 2018

One of the great myths of financial health is that if you’re making the minimum payments on your credit cards or other debt, you have “good” credit. Unfortunately, this isn’t always true.

Your credit score is based on a number of factors. A few things that can negatively impact your credit score big time are:

  • Having too many credit products or too much ability to get into debt.
  • Applying too often for credit.
  • Owing a large sum of overall debt.
  • Credit card balances that are close to, at, or over the limit.

Contrary to popular belief, having good credit doesn’t mean just paying your bills on time. If you’ve fallen into any of the above situations, your credit rating has likely taken a hit.

There are three big keys to good credit:

  1. Apply for credit only when you need it. Avoid credit products like mall promotions and discounts offered in retail stores for applying for the store credit card.
  2. Don’t use more credit than you can afford to pay in full on a given month on a credit card. If you need to make a big-ticket purchase, plan for it in advance.
  3. Don’t go into too much debt.

To the third point, if you have found yourself loaded in debt, you are making monthly payments, and the debt still isn’t getting any lower, you may want to look at other strategies for dealing with it.

It’s best to be proactive when dealing with debt, especially when it comes to your credit score. The deeper in debt you go, the less refinancing options you have.

Keep an open mind and know all the options that are available to you.

If you’re working towards credit repair or maintaining a good credit score while dealing with debt, Fuller Landau Debt Solutions can help. Our qualified debt counsellors will explore all the options available to you so you can make an informed decision.

Contact us today for a free consultation. Call (416) 927-7200 or visit