Paying on time alone is not enough; you need to pay attention to your credit utilization ratio. 

You may be well disciplined with your debt management; You pay all your bills on time; Still, your credit score has not improved over the past few months. Wondering why? 

The primary reason could be that you are maxing out on your credit cards every month. Paying on time isn't enough. You should also consider the amount of credit you have on each card.

Additional Reading: What are the factors that affect your credit score?

Apart from timely payment, the credit utilization ratio — the percentage of the credit balance that you currently use — has the most impact on your credit score. It is calculated on an average and per-card basis. Aim to use no more than 30% of the credit limit on any card; those that use less than that get the better ratings.

Even if you haven't missed a bill, a high usage rate means that you are overusing your credit and might be at risk of default. Even if you make the minimum payment per month, if your balances are very high in comparison to your credit limits, one unplanned occurrence could lead you to default on all of your debts.

Another aspect is the length of the credit history. Because there is less information on which to make a decision about how you treat your credit, a short credit background will lower your credit score.

Additional Reading: Reasons for a low credit score


Obtaining a copy of your credit report as well as a credit score is the easiest way to determine what is impacting your credit ratings. Both give you thorough examples about what's affecting your credit scores and creditworthiness, as well as the ability to link certain variables to your credit report. The knowledge will allow you to devise a strategy for gradually improving your creditworthiness so that you can obtain the credit you need at the best possible rates.