Not only is a good credit score important, but how much credit you utilize is also
Not only is a good credit score important, but how much credit you utilize is also
To have a good credit score, it isn’t just that you make your payments on time to have a strong repayment history. To have a good credit score, and to have a good credit limit its also about your credit utilization score.
When using your credit card, or any other form of a credit (line of credit), try to stay under 30% of credit utilization.
Credit utilization refers to the amount of used credit / total credit issued. If you have a $2,000 credit line, 30% of $2,000 is $600. That is the amount of money owed on your credit card you don’t want to exceed, or not exceed by much very often. Yes, from time to time you can exceed that amount, but try to keep it close to $600 or less.
Credit utilization is as powerful in factoring your credit score as you repayment history.