Credit utilization—also called your usage ratio—measures the amount of your credit card balances compared to your total credit limits.
Why It Matters
Your credit score is influenced by your credit utilization: generally, lower utilization helps improve your score.
Best Practices
- Aim to keep your credit utilization below 30% of your total available credit.
- Even lower utilization can have a positive impact on your credit score.
Monitoring and managing your credit utilization is an easy way to maintain healthy credit and improve your overall credit profile.
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