A very high balance on even one credit card can indicate some risk, and so can negatively impact credit scores, although less than your overall utilization rate.
A combination of these issues can add up to high credit risk and poor credit scores even when all of your payments have been on time.
What hurts your credit score the most?
High Credit Card Balances
The second most important part of your credit score is the level of debt, measured by credit utilization. Having high credit card balances (relative to your credit limit) increases your credit utilization and decreases your credit score.
How can I improve my bad credit score?
Steps to Improve Your Credit Scores
- Pay Your Bills on Time.
- Get Credit for Making Utility and Cell Phone Payments on Time.
- Pay off Debt and Keep Balances Low on Credit Cards and Other Revolving Credit.
- Apply for and Open New Credit Accounts Only as Needed.
- Don’t Close Unused Credit Cards.
Why is my credit score only fair?
Fair credit scores mean you are seen as sub-prime by lenders, which means you are likely going to get less favorable terms than someone with a higher credit score. That can mean higher interest rates and even outright rejection. In general, having good credit scores may help improve your financial situation.