How Do Credit Card Balances Affect Your Credit?
If you don’t already know, credit determines a lot when you are buying a house. This week I’ll explain how high AND low credit card balances can affect your credit, see you on the other side!
Credit scores are a statistical number that indicates your creditworthiness, and ultimately your financial trustworthiness. Credit scores range from 380 to 850 – the higher the better.
So how are the scores calculated? How does a balance affect your credit score?
The scores are calculated based on all the lines of credit that you have and the balances you carry on them. The benchmarks that are used for TransUnion, Equifax, and Experian are determined by the percentage of utilization.
The benchmarks are:
Bad = over the maximum line of credit
Poor = 50 % of the maximum line of credit
Okay = 30 % of the maximum line of credit
Good = 10% of the maximum line of credit