Credit utilization

Credit utilization is one of the most important factors in determining your credit scores; in fact, it accounts for 30% of your credit score. 
It’s something you can control and something that can be improved upon immediately, which makes it a great place to start. 
So what is credit utilization? It’s the amount of debt you have relative to your credit limits. It’s best to keep your credit utilization ratio below 30%. This shows creditors that you can manage your available credit responsibly. 
You don’t want to have your balances maxed out. For example, if you have a total credit limit of $10,000 and your balance is $3,000, you would be utilizing 30% of your available credit. The lower your credit utilization ratio, the better.
There are two ways you can help your credit utilization. First, paying down balances is something that can have an immediate positive effect on your credit report. 
Even just diverting a small amount each month can help out, especially if you’re not adding any new debt somewhere else. The other way is to ask your credit card company to increase your line of credit. 
Again, you shouldn’t actually spend the new credit line, but it’s an easy way to have your percentage of utilized credit drop quickly. 
Using the example above, if you got your $10,000 credit limit increased to $15,000 then your $3,000 balance would only account for a 20% credit utilization. Your credit score would almost certainly improve in this situation

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