A good credit score is a source of pride and prestige. People with high credit scores are sometimes fond of sharing their scores with others. It can be seen as a validation of our worth as borrowers, and at the extreme, as people. That’s because a high credit score indicates that we pay our bills on time, and that we are people who can be relied upon. But it’s also true that a good credit score can mask a serious debt problem.
A credit score indicates what your credit experience has been up to this point.
Considering the factors above, it’s important to realize that your credit score only evaluates your credit. It virtually ignores your income, your assets, your total-debt-to-income, and your debt-to-income ratio. That means that a stellar credit score doesn’t necessarily mean that you’re doing a similar good job in managing your finances overall. It just means that you have good credit, and nothing more.
You can have an excellent credit score, at the same time you have run up unmanageable debt. In other words, you could be on the verge of default, and still have an exceptional credit score.
You owe it to yourself to fix your debt problem, which may mean your credit score takes a hit. That’s OK. Once your debt problem is remedied, your credit score will begin to rise once again. And it will do so without all of the underlying debt that causes so much stress in your life.