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Credit Card Balances can Actually Affect Your Credit Score

By Ruth Racey
Published: Tuesday, February 9th, 2010

Having a high credit score must be one of the most important goals that every credit consumer must be able to think about. Remember that your credit score will surely mean a lot to your financial account, as well as how you can pay your debt and get another loan. 

In this case, whenever you have a high score will make you more likely to have an approved loan. This is because of the fact that lenders always looks at the ability of the consumer to pay a debt, wherein high scores ensures that the consumer have more chances of paying his/her debt than not. This is called credit worthiness. In addition, whenever you have a high score, surely, you can be able to get loans at lower interest rate terms of payment, making it much easier for you to pay for your debt. 

However, having a low credit score surely brings disaster to your financial account. Whenever you have a low credit score to show, surely, you will have a higher chance if having your loan disapproved. This is due to the fact that lenders will actually see you as not credit worthy enough to have a loan. In addition, it will also fore you to pay for your debt with extremely high interest rates. 

In this case, it is fortunate that you can actually make use of your credit card balance to improve your credit score. Here then are the different ways on how your credit card balance affects your score: 

  • You must not carry a balance of more than 30% on your credit account
    Remember that every credit card has its credit limit. In this case, the best thing that you can do to improve your score is for you not to accumulate a balance that is way beyond 30% of your credit limit. Remember that if you have a balance beyond 30%, you re already required paying for it even before your credit card statement come. However, when it remains always below 30%, you can pay at the time your credit card statement comes without hurting your score. 
  • Pay your balance in full the time your credit card statement arrives 
    Also, whenever you are able to pay for your outstanding balance in full the time that your credit card statement arrives, surely, you will get higher score. This is due to the fact that whenever you are paying immediately your balance, there are lower chances that you will accumulate a large amount of debt. This will make you credit worthy, raising your credit scores.

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