You might not think about how your credit score is calculated or how your activities affect it when you think about it. Simply said, every credit score comprises a set of factors, each of which has the potential to raise or lower a credit score. Given that one of the factors that might affect your credit score is credit use, it may be time to learn how to control your credit utilization.
To effectively manage your credit usage rate or let repair credit companies do so, you must first grasp what it is and how it might affect your life adversely or favorably.
What is the significance of your credit usage rate?
One of the numerous things that might affect your credit score is credit use. It accounts for 30% of your FICO credit score, making it one of the most essential criteria in determining your credit score. Lenders and creditors may or may not accept your application, depending on the number. This is because creditors and lenders analyze your credit usage rate to assess your capacity to manage your money.
Keeping track of your credit use
Because your credit usage rate accounts for 30% of your credit score, you’ll want to keep an eye on it to make sure it doesn’t start to hurt your credit score. This is especially true if you want to raise your credit score to enhance your chances of getting accepted for items that need strong credit, such as a home loan or an apartment.
You may effectively manage your credit use rate by doing the following:
• Keep a close eye on your credit card activity
• Pay off your debts
• Keeping credit accounts open, although they are rarely used
• Paying your credit card amount in full rather than just the minimum
• Increasing the credit limit on your credit card
Keep in mind that the purpose of credit repair service is to keep your credit utilization rate at 30% or below. This doesn’t mean you should stop using your revolving credit entirely, but you should do it wisely if you don’t want your credit score to suffer.
