You likely already know that your credit score is the number lenders use to decide whether to approve a loan, what interest rate to offer, or whether to extend credit at all. But what you might not know is that your credit score is deeply connected to how you manage your debt. One affects the other—sometimes in ways that aren’t obvious at first. So in this article, we’re going to answer a big question: What will happen to your credit score if you do not manage your debt wisely? More importantly, we will take a look at how you can protect both, even if you’ve hit a rough patch.

Debt and Credit Scores Are Deeply Connected

Think of your credit score as a snapshot lenders use to decide how safe it is to lend to you. It’s a three-digit number, typically ranging from 300 to 850, and it’s built on constantly evolving mathematical formulas. These formulas are designed to answer one key question: “What is the likelihood that this borrower will be late on a bill within the next 24 months?”

In other words, your credit score doesn’t just reflect your financial past—it’s trying to predict your future behavior. And while there are several categories of behavior that go into that prediction, two of the most important are credit utilization and payment history. Both are directly influenced by how you manage your debt today.

This is why it’s so important to understand what will happen to your credit score if you do not manage your debt wisely—because debt habits today shape your credit opportunities tomorrow.

Category #1: Your Credit Score and Credit Utilization

Credit utilization refers to how much of your available credit you’re using. For example, if you have a $10,000 credit limit and you’re carrying a $9,000 balance, you’re using 90 percent of your available credit.

Carrying high balances, especially if you’re close to maxing out your cards, tells the credit bureaus that you are in debt and might be experiencing some financial strain. This makes sense, right? If you are relying on credit cards to get through the month and pay for everyday expense, it sends a message to credit bureaus: This person is having financial problems.

High utilization doesn’t just reflect debt—it predicts risk. And over time, it becomes a major factor in what will happen to your credit score if you do not manage your debt wisely.

So remember the magic number when it comes to credit utilization, 30. Your credit utilization makes up about 30 percent of your score. And, ideally, you want to stay below a 30 percent utilization—though lower is better.

But when you’re buried in debt, keeping low credit card balances can feel impossible.

A Note About Credit Utilization

Remember when we said that the mathematical formula for determining your credit score is constantly evolving? So, too, is your credit score. Your credit score can change from day to day, so ideally, you would never have a utilization that exceeds 30 percent.

Some people max out there credit cards during the month, and then pay them off when the bill comes. If you can help it, don’t do this. This is because you never know when your credit card will report your balance to the credit-scoring bureaus. If you have the finances to pay your balance low, keep it low month-round.

Category #2: Payment History

One of the biggest indicators that credit scoring bureaus consider when they assign a score to you is whether you are managing your current obligations. Are you paying your bills on time? If you are, great!

But if not, your score can take a serious hit. This is because your payment history makes up 35 percent of your FICO score. Missing payments is one of the fastest ways to damage your credit—and it’s a major reason why your credit score drops when debt isn’t managed wisely.

Each time you miss a due date, a negative mark is added to your credit report. If you’re more than 30 days late, the damage becomes even more significant. And if you continue to fall behind, you risk collections, charge-offs, and even lawsuits. These are the red flags that drive credit scores down the fastest.

And here’s the hard part: If you’re already deep in debt, the money simply isn’t there. When you’re choosing between groceries, rent, and the minimum payment on a credit card, of course some bills are going to fall behind.

And there is one more reason your credit score is tied to your debt …

The Emotional Toll

When debt becomes overwhelming, people often stop opening bills. They avoid answering unknown numbers. They feel ashamed, confused, and stuck. And that’s totally understandable.

But while that emotional weight is valid, ignoring the problem only makes things worse. The longer you wait, the more damage is done to your credit score—and the harder it becomes to bounce back.

Why You Can’t Fix Your Credit Score Without Fixing Your Debt

As a company that offers credit education, we believe in helping people build long-term financial health. But here’s something we’ve learned: you can’t fix your credit score if your debt is still out of control. That’s why our programs aren’t for everyone—at least not yet.

If you’re struggling to keep up with bills, missing payments, or relying on credit cards to make it through the month, your score will keep taking hits … no matter what steps you try to take to improve it.

This is where a lot of people get misled. Credit repair companies often advertise quick fixes by disputing negative items on your report. But if the underlying debt isn’t resolved, any improvement is temporary. Miss a payment next month, and your score drops again. It’s like painting over a cracked foundation: the surface may look better, but the damage underneath continues.

So here’s the rule we share with everyone: Don’t focus on building your credit score until your debt is manageable. Otherwise, you’re fighting against a system that’s not built to work in your favor.

And here’s something to consider: if you can’t reasonably pay off your debt within the next 24 months, it may be time to consider bankruptcy. That’s not giving up. That’s using a legal tool that exists for situations exactly like this.

If the idea of bankruptcy feels overwhelming, you’re not alone. But avoiding the conversation won’t make the debt go away. Talking to a debt professional can help you get clarity—and there’s no cost to learn your options.

A free debt analysis can help you understand:

• Whether your debt can be managed with a payoff plan
• If you qualify for a bankruptcy discharge
• What kind of credit recovery is realistic for your situation
• How long it may take to rebuild, based on the path you choose

There’s no shame in asking questions. And there’s real risk in waiting too long.

The Smart Way to Break Free from Debt and Rebuild Your Credit

Bankruptcy: A Strategic Reset (Not a Failure)

Let’s say you already know the debt is too much. The balances keep growing. The interest won’t stop. You’re doing your best, but every month feels like a step backward—and your credit score reflects it.

In that case, bankruptcy might be worth exploring, not as a last resort, but as a legal reset.

We know that word carries stigma. But here’s what most people don’t realize: bankruptcy doesn’t ruin your credit. If you’ve been missing payments for months or even years, your score has already absorbed the biggest hits. Bankruptcy simply marks the turning point.

And once your debt is discharged, something powerful happens: your credit can finally start to recover.

You stop missing payments. Your balances drop to zero. Your debt-to-income ratio improves overnight. You gain the space—and the breathing room—to rebuild.

With the right strategy, it’s possible to reach a 720 credit score within two years of filing. Some people enrolled in the Credit Rebuilder Program start seeing progress within just a few months.

Bankruptcy isn’t about failure. It’s about restructuring your finances so you can move forward, not just survive.

The Bottom Line

So what will happen to your credit score if you do not manage your debt wisely?

It will suffer—slowly at first, and then all at once. Your score will drop. Interest rates will rise. Lenders will back away. And everyday tasks, like renting an apartment or setting up utilities, will become harder and more expensive.

But that’s not the end of the story.

Whether you’re barely staying ahead or feel like you’ve already fallen behind, there are real solutions available. Bankruptcy is one of them. The Credit Rebuilder Program is another. But the first step is understanding where you stand—and what path will get you out.

There’s no cost to learn your options. But the longer you wait, the fewer you may have.

If you’re ready to get clarity, start with a free debt analysis. And when you’re ready to rebuild, we’ll be here to help you do it—step by step.