About Credit Utilization

 
  

About Credit Utilization

The important thing to know about credit utilization is the right balance between credit used against credit available. As long you are keeping credit used below 30 percent as against credit available from lenders. This will keep your credit score up. If your credit used ratio is more then 50 percent it affects your credit score. Lenders will consider giving credit to you risky.

Lot of people think having more credit card is good and increases your credit availability. The fact it doesn’t matter how many credt cards are available and neither it matters how much credit is available on these cards. What matters how much percentage of credit available has been used. Keep your credit used below 10 to 30 percent.

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This is why credit utilization is important factor of your credit score makeup. For example you have three credit cards and each of the credit cards have one thousand each as credit available. If you use $500 on one card and $ 100 on second card and no purchase on third card. Your credit used ration to available is 20 percent. Now if you close one unused card then your credit used ration jumps from 20 percent to 30 percent. Now you understand opening new cards will not save the problem. What you need is to bring down rato of credit used under 30 percent to enjoy higher credit score ratings from credit bureaus. This is all about credit utilization

Credit score makeup

  • 1. Payment history: - 35 percent
  • 2. Amounts owed: - 30 percent
  • 3 Length of credit history :- 15 percent
  • 4 New credit: - 10 percent
  • 5. Types of Credit used: - 10 percent

Important Credit Card Links

Credit Score Websites

1. Free Credit Report

2. CreditReport.com

3. Check Credit Score

4. Experian - Bureau

5. Equifax - Bureau

6. Transunion - Bureau

6. About Credit Score

Identity Theft Complaints

1. FTC - Govt.

2. SSA - Govt.

Credit Reporting Agencies

1. Experian

2. Equifax

3. Transunion