4) Watch the Credit Utilization Ratio
Just because you have a high credit line doesn’t mean you should use it. Of course, it’s there if you need to make a big purchase, but just make sure you’re able to pay it off quickly. Keeping the card balance below 30% of the credit line majorly helps improve your score. For example, if your limit is $1,000, try to keep your balance at $300 or less. Even if you’re paying off your minimum payment in full and on time, it’s still hurting your score. Why? Because it’s your balance that’s being reported to the credit bureaus and high balances hurt your score. If you know the charge is going to exceed that 30% mark, consider pre-paying some of the cost to avoid that high charge. Also consider that keeping those utilization rates below 10% will actually improve your score.
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