Follow us on LinkedIn
If you’re like most people, you have at least one credit card. And if you’re like most people, you use your credit card for everyday expenses, such as groceries and gas. This is called “credit card utilization.” When it comes to your credit score, this is a good thing. But there are a few things you need to know about credit card utilization in order to keep your score high. In this blog post, we will discuss the ins and outs of credit card utilization and how to keep your score intact.
What is credit card utilization and how is it calculated?
Credit card utilization is the percentage of your available credit that you are using. For example, if you have a $1000 credit limit and you have charged $500, then your credit card utilization is 50%.
Your credit utilization is calculated by dividing your total balances by your total credit limits. This gives you a percentage that reflects how much of your available credit you are using.
What’s the ideal amount?
Ideally, you want to keep your credit card utilization below 30%. But if you can keep it below 20%, it’s even better.
What if my utilization is higher than 30%?
If your credit card utilization is higher than 30%, it will have a negative impact on your credit score. So, if you’re using more than 30% of your available credit, you need to take steps to lower your utilization.
How does credit card utilization affect my credit score?
Your credit score is based on several factors, including your payment history, how much you owe, and how long you’ve been using credit. Credit card utilization is one of the factors that lenders look at when determining your credit score. A high credit card utilization can negatively affect your score, while a low credit card utilization can positively impact your score.
How can I keep my credit card utilization low?
Credit card utilization is an important factor in determining your credit score. There are a few things you can do to keep your utilization low, such as paying your balance in full every month, keeping your credit limit high, and using a credit monitoring service. By following these tips, you can help ensure that your credit score stays high.
Why keeping your credit utilization low is important for your credit score
Credit utilization is one of the factors that lenders look at when determining your credit score. A high credit card utilization can negatively affect your score, while a low credit card utilization can positively impact your score.
Tips for using a credit card without damaging your credit score
If you’re using a credit card to build your credit score, there are a few things you can do to keep your utilization low and avoid damaging your credit.
-Pay your balance in full every month
-Keep your credit limit high
-Use a credit monitoring service
These tips will help you use a credit card responsibly and maintain a high credit score.
Closing thought
Credit card utilization is an important factor in determining your credit score. By following these tips, you can help ensure that your credit score stays high.
Further questions
What's your question? Ask it in the discussion forum
Have an answer to the questions below? Post it here or in the forum
