If you’re trying to improve your credit score and also just get a better grasp on responsible credit management, then your credit utilization ratio (or credit usage) is a good place to start. Just as it sounds, this ratio shows how much of your available credit you are using at any given time. The credit utilization ratio is also a piece of information that credit reporting agencies will use to determine your credit score. So this is important to keep track of.
How to Calculate Your Credit Utilization Ratio
Check out this handy video to find out how to calculate your credit usage…
Good Credit Management
A low credit utilization ratio illustrates good credit management by a consumer. Anything below 50% at any given time is considered healthy, but the lower the better. Minimize your credit card use to keep a low usage rate, and your credit report will reflect positively for it.
Looking for more help with credit and debt management? Contact the professional counselors at American Consumer Credit Counseling. Call 800-769-3571 to speak with a counselor today! Or visit ConsumerCredit.com.