Credit card interest rates are all different depending on the specific individual who is opening the account. If you usually have a high-interest rate on your credit card, your credit score may be the reason for this. These are the three top factors in your credit score that can impact the interest rate you receive.

Credit Score – Your overall credit score can tell a lender a lot about your borrowing habits. If you have a high score, you most likely have good credit habits. You don’t overspend on credit or miss payments. Your score is a good indicator for that lender and will most likely reward you with a lower interest rate. If you have a high score, this shows a lender that you may not be a trustworthy borrower and punish you with a higher interest rate.

Payment history – your payment history is a part of your credit score but is weighed more at 35%. This means that lenders are specifically looking at this part of your score. If you have 100% on-time payments, this means you aren’t late on payments and can pay back your loans. If your payment history is low, this shows lenders that it is hard for you to pay back your loans. If you aren’t able to make payments, your loans will go to collections, and lenders lose money when this happens.

Credit utilization – your credit utilization is the ratio or percentage of the debt you have used. Many credit cards have the maximum amount you can borrow. The closer you are to maxing out your card, impacts your utilization. This would be an example of high utilization. Lenders want borrowers with a low utilization ratio. This tells lenders that you can take on additional debt and make payments. When you are close to maxing out, you’re at risk of not being able to make your monthly payments.

If you are trying to lower your interest rates, focus on improving these three factors. If you can improve your payment history and reduce your utilization, your credit score should increase. Some people can fix their credit in a few months.