Credit utilization is one main piece of your credit score puzzle. it is the credit utilization that measures the balances one owe on your credit cards in relation to the cards’ credit limits. The calculation is always the total balance on all cards divided by sum of credit limits.
To always gets it right with credit utilization it is good to always stay below 30%. This means adopting Strategies like improving your credit utilization ratio focus on reducing the numerator i.e shrinking the balances owed and then managing the denominator which is increasing the amount of credit available.
So what are the different ways you can improve or optimize your credit utilization ratio:
Start with paying more than the monthly minimum debt to reduce your credit card balances.
Then go ahead to leave cards open after paying your debt to decrease your overall balance owed. You would only maintain the total limit. This will aid with reducing your credit utilization ratio.
Ask for a credit limit increase on one or more of your card but don't spend more.
You can also refinance your high interest-rate credit cards with a personal loan that comes with better beneficial terms to help reduce the debt.
You need to Consolidate multiple credit card balances into one to help lower interest rate loan and it will also help to reduce the amount of interest you owe,
To always gets it right with credit utilization it is good to always stay below 30%. This means adopting Strategies like improving your credit utilization ratio focus on reducing the numerator i.e shrinking the balances owed and then managing the denominator which is increasing the amount of credit available.
So what are the different ways you can improve or optimize your credit utilization ratio:
Start with paying more than the monthly minimum debt to reduce your credit card balances.
Then go ahead to leave cards open after paying your debt to decrease your overall balance owed. You would only maintain the total limit. This will aid with reducing your credit utilization ratio.
Ask for a credit limit increase on one or more of your card but don't spend more.
You can also refinance your high interest-rate credit cards with a personal loan that comes with better beneficial terms to help reduce the debt.
You need to Consolidate multiple credit card balances into one to help lower interest rate loan and it will also help to reduce the amount of interest you owe,
