Minimizing the Credit Card Balance Ratio to Maximize Your Credit Score

Most people today understand the importance of having a good credit score, however, few understand how much credit card balances and limits affect their score.  The credit scoring model places a lot of emphasis on the ratio of a credit card’s balance to it’s limit.  The lower this ratio the better and the optimal ratio is less than 30%.  A high ratio lowers a score and, if combined with other maxed out credit cards, can do so significantly.  To maximize your credit score, increase the limit on your cards as high as possible and then decrease your balances to no more than 30% of the limit.  Use additional credit cards if you need to, but keep your credit card balance ratio as low as possible.  If you would like to know your credit scores, just let me know as I would be happy to pull your credit report for you.

January 24, 2011 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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