We would like to share with you a great trick to use if you have charge cards. 30% of your score has to deal with something call credit utilization.
What are your total revolving debt balances compared with your revolving limits? A quick example, let’s say you have two cards with total balances of $250 and your total limit is $500. That will give you a credit utilization of 50%, $250 balances/$500 total balance. It’s recommended to have your utilization under 30%, to the least. The smaller that percentage the better though.
A quick way to give your score a boost is to make a line increase request to your current card providers. Let’s use our previous example for a better explanation. If you requested a line increase with each card provider and they both increased your line by just $500, that will significantly lower your credit utilization ratio. Your balances staying the same, but your limits increase $1,000 total will give you at the utilization of 16%. Because $250 divided by $1,500 equals 16%.
A credit utilization this low is great! And what’s better is, you didn’t have to add any more money to your balances at all. By simply requesting a line increase with your current card providers can do wonders for your score. If you have been with your card provider for at least 6 months, I highly recommend that you try this strategy.
I hope you found this helpful. If you need help improving your score, please go to our website at www.jennfinancialsolutions.com and click on “Credit Consultation” to get a FREE strategy session with us today!