Today's lesson, Racism. If you see something written here that you’ve said or done, use it as an opportunity. Take it as a wake up call and make the decision to grow, change and be conscious of your own privilege. Remember, I am not a speaker for the entirety of a people.
One of the most under rated ways to help your credit score is to keep your credit availability ratio at 80% or less.
The ratio is often the thing that people overlook. For those of you that pay your bills on time and don’t quite understand why your credit score isn’t where you’d like it to be, it may have something to do with your ratio of credit availability.
Your credit ratio makes up THIRTY PERCENT of your FICO score. It’s huge!
The number to remember here is 80%.
The ultimate goal is to have every single item on your credit report at 80% use of less.
For example, if you have a credit card with a credit limit of $1000, your goal is to never go over an $800 balance.
This, of course, is not always possible. This is especially unlikely if you have a loan and or mortgage. Getting a loan down to 80% of it’s total isn’t usually something we can do over night. When at all possible, try to pay more than the amount due on any loan or mortgage until it get’s to that 80% ratio.
If you have loans and/or mortgages, don’t panic. Paying on time, every time is very important. As far as the weight these things have on your credit score, credit cards weigh MUCH heavier on ratio than loan/mortgages. Even with this, getting everything on your credit report to 80% or less is the ideal.
Even when you pay on time, every time, having a credit availability ratio over 80% as an average of your total report, can and will stop you from getting a new line of credit. It can also be the cause of extremely high interest rates when you do get approved for credit.