Credit Advice

It’s not necessarily how much you owe that hurts your credit scores


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Credit Advice

It’s not necessarily how much you owe that hurts your credit scores

Dear Experian,

My credit is a little messy. My score is 550 but my debt is less than $5,000. Why is my score lower than someone who owes tens of thousands? Can multiple inquiries hurt your score, and how bad do they?


Dear IXS,

The fact that you acknowledge your credit report is “a little messy” is a pretty good clue as to why you have a poor credit score. The key issue isn’t how much you owe. It’s how you repay what you owe, whether it’s $500, $5,000 or $50,000.

Credit scores predict the risk that a person will not repay a debt as agreed. A person may only have a few hundred dollars of debt, but may have late payments or collection accounts because they were unable to repay even the small debt.

Another person may have thousands of dollars in debt, but all of their payments are on time, and their debt is not rising.

In fact, when we evaluate scores across the nation, the city which has the highest average scores actually has higher debt than the average in other cities with lower scores.

Significantly, they also have fewer missed payments on average and other positive characteristics such as longer credit histories. Those with good scores also will likely have higher credit limits because they have demonstrated that they can keep their debt well within their limits, and creditors are willing to risk giving them more credit.

Inquiries have little impact on credit scores. They simply are a record that someone has accessed your credit report in response to your application for new credit. They only become an issue when they are recent and if you already have problems in your credit history.

The inquiry indicates you are trying to take on more debt, and that is worrisome when you already have high debt or are having trouble repaying the debt you have.

So, I recommend that you stop making “messes” when repaying your current debt. When you demonstrate that you can manage it well, there is a good chance your creditors will increase your credit limits, which will help your debt-to-limit ratio, and that will help your score.

So, what city has the highest scores? It is Minneapolis. You can find out where your city ranks at

Thanks for asking.

- The "Ask Experian" team

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