You are using a bitmap font which is not resolution independent (yes, there is such a thing!), use OpenGL and your graphics card is not up to snuff or you have a rather generic more widespread problem with how your system handles fonts. Simple cross-check: Attempt to use the same font elsewhere/ use anotehr font in AE and see, if it shows the same behavior. The rest is too vague to make any sense of it, so you would need to provide more info and even screenshots.
> When I zoom in it just gets worse.
Does the pixelation occur when you view the composition at 100% (not zoomed)?
Zooming in a preview will show the pixels in an image. That's normal. From After Effects Help:
"Note: After Effects renders vector objects before zooming (scaling for preview), so some vector objects may appear jagged when you zoom in on them. This apparent pixelation for zooms does not affect scaling of layers or rendering to final output. "
I have tried to font in Illustrator and it is perfect. However, when I try another font in AE its still pixellated?
A screenshot would help us. My thought is that you're using your text in a comp that's not using square pixels and you have aspect ratio correction turned on. If you render it, how does it look?