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Credit Card Utilization Affects Credit Score There are many things that you can do to improve your credit score and get a quick boost in score. One of these things involves your credit card utilization, otherwise referred to as debt to credit ratio. This... More

Credit Card Utilization Affects Credit Score There are many things that you can do to improve your credit score and get a quick boost in score. One of these things involves your credit card utilization, otherwise referred to as debt to credit ratio. This number is the total credit card debt in relation to the total amount of credit available across all of your cards. Here is a very simple example: if you have 5 credit cards each with a $1,000 credit limit and a $500 balance on each card you would have $2,500 of debt and $5,000 total credit available. This would result in a 50% utilization rate, or debt to credit ratio. The lower this percentage, the higher your credit score will be. If you are going to be shopping around for competitive interest rates for a new car purchase or a mortgage loan, then you will want to pay down your balances to maximize your FICO score before applying. This is a very simple way to raise your score and you will see the impact on the next reporting cy Less