Your Credit Score

Your Credit Score

There are five main categories in credit scoring.  Today I will share about the one on the chart called amounts owed.  This is known in the industry as the debt utilization ratio.  It is figured by taking all revolving debt(credit card debt) and dividing that number by the high credit limits reported by your credit card companies.  For example $100 owed to Lowes limit of $300, $200 owed on Visa card $500 limit.

Total owed $300/ divided by $800 Limit gives you a .375% debt utilization ratio.  

We know that if you have over 20% utilization your score will be affected and be lower, if you are over 50%, your score will even be lower, and if your utilization is 70% and over it will even cause your score to be lower.

You can call me to get more information or follow my blog and will continue this on a series on credit scoring.


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