Posts Tagged ‘ utilization rate ’

How utilization rate affects credit scores

Dear Experian, I have been led to believe that a component of one's overall credit score is the ratio of current credit card balances to one's total available credit. If one had three credit cards, is each card's ratio calculated individually, or is it one's total credit card balance compared to one's total available credit? Also, I've heard that the important thresholds are 30 percent and better yet, 10 percent; is that correct? - RLS

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Having bad credit even when all of your bills are paid on time

Dear Experian, Why is my credit bad? I paid every thing on time. - WOD

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Lowering credit limits can hurt credit scores

Dear Experian, I have heard that requesting lower credit limits can hurt your credit scores. Is this true? -MMB

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The impact of using 99% of your available credit before applying for a mortgage

Dear Experian, I was looking at my credit report online and it showed that I am using 99 percent of the credit available to me. What does that mean? Also, I know that I have one student loan that is at almost $60,000. How much effect is that going to have on me if I am trying to get a home loan? - RAH

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Rumor to leave accounts open is correct

Dear Experian, My husband and I have several credit cards, all with limits under $1,500.00. We wanted to pay off and close the high-rate cards we don't use, because we were told by a car dealer that even if the card with a high balance is paid to a zero balance, the fact that it is still open and "available" credit for using will hurt our scores. On the contrary, I have heard a rumor that closing a credit card looks bad. What's the truth in this? - EPH

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