One of the top factors used in determining your credit score is your credit utilization rate.
30% of your credit score is determined by how much credit you have outstanding expressed as your credit utilization ratio.
How do the Credit Bureaus calculate my Credit Utilization Ratio?
Credit utilization is the ratio of the actual debt you owe compared to your available line of credit. For example, if you have a credit card with a $10,000 credit limit and a $6,000 balance, your credit utilization is 60 percent. The lower your credit utilization rate, the better it is for your credit score.
Keep an eye on this, and never let your credit utilization rate go over 25% just to be safe – spread it around! But best of all, pay it off!
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