Credit Tip

Pay down the card that’s closest to its limit first. Your credit score is affected not only by your total debt-to-credit available ratio, but by that ratio for each individual card. If you have cards that are maxed out or close to their limits, pay those off first.

When you have credit cards that are close to their limits at the time your bank reports to the credit bureaus, it’s killing your credit scores. Even if you pay the balance off in full every month but your credit card issuer reports the balance before you make your payment… are seriously hurting your credit scores.   You’re risking having your other credit card issuers raise their interest rates and having other credit woes. read also Protecting Your Personal Credit and Financial Reputation

Your “credit utilization ratio” accounts for about 30 percent of your credit score. If you’re hovering near the max on your credit accounts, you’re considered a high risk to credit card companies.

“If you have a credit card with a limit of $10,000, and you owe $3,500 on it, that’s 35 percent utilization ratio.” The less you use the better. Those with the best credit scores on average have utilization ratios close to zero. Anything over 35 percent is considered high and WILL negatively impact your credit scores.

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