Here is how #creditcard usage affects your credit score.
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Crédit Utilization; I'll go first: Did you know that credit utilization is ALMOST as important as your payment history when it comes to your credit score? If you have a perfect payment history but still have a less-than-perfect credit score, Look at your credit utilization. Your utilization should be below 30%, but below 10% is best. Example: You have $10,000 in available credit. Keep your utilization below $3000; below $1000 is best. So don't charge $7000 if you can't pay it down by the STATEMENT date What is Credit utilization ? Credit utilization is a ratio of your total credit card balances to your total credit card limits
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To keep your credit utilization low, try paying off your credit card balances in full each month. If you can't pay in full, just make sure that you get the balance down to UNDER 30% of the credit limit. You can also improve the percentage of usage by requesting a credit limit increase. Another good trick is to spreading out your purchases across multiple credit cards to make sure no card goes over 50%, which is a credit scoring danger zone. #creditbuilding #financialcoach #credittips #savemoney #creditscore #wealthbuildingforall
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True or False? Closing a credit card improves your score? Myth! Closing a credit card may actually lower your score. Credit scores measure risk by the percentage of your available credit that you’re using. If you close an unused account, it reduces the amount of total available credit, thus increasing your percentage of available credit used. That said, if you can’t resist using said credit card, then it is better to close it and avoid getting into more debt. For a free consultation call us now at 559-907-1230 Or visit us online at https://lnkd.in/emR9dCv #credit
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True or False? Closing a credit card improves your score? Myth! Closing a credit card may actually lower your score. Credit scores measure risk by the percentage of your available credit that you’re using. If you close an unused account, it reduces the amount of total available credit, thus increasing your percentage of available credit used. That said, if you can’t resist using said credit card, then it is better to close it and avoid getting into more debt. For a free consultation call us now at 559-907-1230 Or visit us online at https://lnkd.in/emR9dCv #credit
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Closing a credit card account can have a negative impact on your credit score, especially if it's an older account or one with a good payment history. This is because it can reduce your total available credit, which can increase your credit utilization ratio. Keeping the account open (even if you don't use it much) and in good standing can be beneficial for your credit score. #creditscore
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Tuesday Tip: Many consumers don't realize how much their credit card balances can impact their credit scores. Even if you have never missed a payment, if you allow your credit card balances to get anywhere near the credit limits on the account, you'll start to see a pretty severe impact to your credit scores.
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Don't you just hate it when you pull credit for a potential borrower and their scores come back lower than expected (they were probably looking at Credit Karma 😉), they don't have scores reporting on all 3 bureaus or they don't have any scores at all? There are a variety of reasons why this can happen but typically it boils down to there being recent late payments, the balances on the cards they have open being too high or they don't have any credit cards at all. A quick way to boost credit scores is to have them get their card balances down to 30% or less or if they only have one card (or no cards) to get at least two cards reporting asap!
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How to Improve Your Credit Score - Part 1 Make on-time payments a priority in maintaining a good credit score. Late payments, especially those over 30 days, negatively impact your credit score. Consistent late payments can lead to a decreasing score and put your account at risk of being charged off. Tip: Set up auto-draft payments to ensure timely payments. Regularly update your payment details, particularly if there are changes in your bank account or if a new credit/debit card is issued. Keep your credit card balances low to benefit your credit score. Balances exceeding 30% of your available credit limit are viewed as risky, potentially lowering your score. Maintaining manageable balances shows responsible credit usage. Tip: Only charge what you can comfortably pay off to avoid exceeding your limit, over-limit fees, interest charges, and potential score reductions.
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Carrying a balance on your credit card may not help your credit score. In fact, it could hurt your score as it directly affects your credit card utilization rate. Not to mention, it may be more beneficial to pay off your credit card bill in full each month. https://myoc.io/pdaigle #partnerwithpatty #batonrougeproperties #neworleansproperties #mortgageloans
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Myth? I should close out unused credit card accounts with zero balances to boost my credit score? True! It’s generally smart to keep unused credit card accounts with zero balances open instead of closing them out because closing the account will reduce your total available credit. This, in turn, will increase your credit utilization rate, or the ratio of your outstanding credit card balances to your total credit limit. This increase could be an indication to the credit reporting bureaus that you represent a higher credit risk, thus lowering your credit score. Also, a credit card issuer can make the decision to close your account due to inactivity and is not required to notify you before doing so. You should try to use your card regularly -- at least once every couple months -- to keep it active. Questions give us a call at 559-907-1230 Or visit us online https://lnkd.in/emR9dCv #credit
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