Please enable JavaScript to view the comments powered by Disqus.

What Is More Important, Credit Score or Credit History?

What Is More Important, Credit Score or Credit History?

Editorial Disclosure: Editorial content, including card comparisons and card reviews are not provided or commissioned by the credit card issuer. Opinions expressed here are the author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. may be compensated through Affiliate Programs for referrals.

• Updated: July 13, 2018

These days, having an open credit line available to use in an emergency or for a planned purchase is always helpful.

Credit cards and open credit lines are a convenient way to pay for expenses such as car repairs, home repairs. You might even decide to use them to have some fun, like planning a surprise weekend away from home. Related: What you need to know about your credit score

If you are thinking about applying for a new credit line or credit card and you are wondering whether your Credit Score or your Credit Score is more important for having your application approved, this article will help explain how both of these factors relate to your overall creditworthiness.

Your Credit Score

Whenever anyone applies for a new line of unsecured credit, whether it’s a store issued a credit card, a major credit card, a car loan, or another type of personal loan from a first-tier provider, the credit issuer will “pull” or check your credit score to decide your creditworthiness.

Your credit score is a number that is derived using an algorithm that weighs factors such as your debt-to-income ratio, how many open credit accounts you currently have, the amount of money you currently owe, your overall payment history, and the number of recent inquiries for new credit you have made.

According to FICO, a median - or average - credit score is 723. Credit scores of 750 or above are considered to be “excellent.” Keep Reading: 5 surprising benefits of having good credit

People with higher credit scores typically qualify for better terms when they are approved for new credit. They are often extended higher spending limits, approved for higher loan amounts, and benefit from lower interest rates on the funds that they borrow.

People with lower credit scores will oftentimes be approved for unsecured new credit, but it comes with a higher interest cost and a lower loan or credit amount.

In some cases, people with lower credit scores may have their unsecured credit applications declined. They may also be required to put down larger down payments or security deposits to qualify for financing.

Your Payment History

Your overall payment history is another important factor in a lender’s decision to approve an unsecured credit or loan application.

As mentioned before, your payment history ties in directly with your Credit Score, so even though these two credit factors are different, they are both equally important for people who are seeking new, unsecured credit.

Generally, people who have a strong history of making all of their payments on time are going to have an easier time meeting lenders criteria for new credit.

A recently missed payment on your payment history is going to be the most damaging. If the late payment was a simple oversight or mistake, and you speak with a representative from the credit card company, many of them will extend a one-time courtesy of not reporting you late to the three major credit reporting agencies. Keep Reading: How to handle a credit report error

Several missed payments will quickly impact your credit score negatively and will likely send “red flags” to your creditors that there’s a possibility that your financial position has changed.

As time passes, the length of time since your last missed or late payment will start having less impact on your credit score. For instance, if your last late payment was made in June 2014, it is losing significance when compared to all of the “on time” payments you have made since then.

On-time and consistent payments to your creditors are the best ways to prove your creditworthiness and improve your credit score at the same time. Both factors are equally important when you are building up a positive credit history.

Tactics for Building or Rebuilding Your Credit History

If you do not have a strong credit history or an immediate need for financing or credit, now is the best time to start establishing or building a positive credit history.

Secured credit cards are one of the best ways to build your credit.

Secured credit cards differ from unsecured credit cards in the fact that consumers must initially “secure” the card with a deposit that is usually equal to the credit limit on the card.

Depending on the financing company, this type of credit card may also come with an annual fee or a monthly maintenance fee. If you are thinking about using this type of financial product to build your credit history, be sure to read the terms of the secured card to avoid any billing surprises later. 

Once the card has been “secured” with a deposit and the payment of applicable fees, the cardholder can use their secured credit card up to the credit limit. At the end of the billing cycle, the cardholder must then make the minimum payment or pay the balance off in full. Keep Reading: Will not using your credit card hurt you? is a credit card comparison site. We have been providing our customers with the best credit card offers available since 2010. If you are looking for a new credit card, visit us here

We think you'll also enjoy
Young black woman on computer
Top 5 Personal Finance Tips for Managing your Money
Business woman running finish line
6 Financial Moves to End the Year Successfully
Student loan debt
The Do's and Don'ts of Eliminating Your Student Loan Debt


We want to hear from you and encourage a lively discussion among our users. Please help our site stay clean and safe by following our posting guidelines, and avoid disclosing any personal information such as phone numbers or bank account information.

The comments posted below are not provided, reviewed or approved by the card issuers or advertisers. Additionally the card issuer does not assume responsibility to ensure that all posts and/or questions are answered.