Debt to Credit ratio for cards

What is the magic number to stay below your credit balances for improvement in the FICA score? I have heard 50% all the way down to 25%. Excessive balances is the only thing I am dealing with in my derog dept.

Thanks in advance.

I advise people to stay below 30% of their credit limit. Think of it this way, the lower your debt to credit ratio the better. If you get your ratio below 50%, you'll be doing very well.

Lower Your Debt - Before seeking a large loan such as a mortgage its a good idea to pay off as much credit card debt as possible. Having your credit cards to the "MAX" lowers your credit worthiness substantially which increases your future borrowing costs. Try to keep your balances at or below 20% of your credit card limit. Thirty percent of your FICO score is based upon this information. On the average by paying down your credit cards (from being maxed out) will raise your FICO score by over a hundred points once your new balances are reported to the credit bureaus.

From;

Stuff About Credit And Borrowing

Over 80% kills your credit
Over 50% Lowers a lot your credit
Over 15% Lowers a bit your score.
Below 15% is perfect. I know from a very reliable source.

Also, you must take care of debt and income. As if you have below 10% on all your cards, and adding all the debt becomes 50% or closer of your total income, your credit goes down as well (I "love" how smart are the peps who invented this :lol: You are screwed almost always. I know several tricks... but I'm sure I'm failing in a lot of detail as well)

in my point of view Lower Your Debt - Before seeking a large loan such as a mortgage its a good idea to pay off as much credit card debt as possible.

Lol... I almost answered myself on my previous post on this thread... I only use this screen name at this forum....

I will add then... having one or two empty credit cards is good as well... Some months you charge a good amount to it, (over 50% if possible) and you pay the entire thing off... That will also help.

Quote:

Originally Posted by Bahamut

Over 80% kills your credit
Over 50% Lowers a lot your credit
Over 15% Lowers a bit your score.
Below 15% is perfect. I know from a very reliable source.

Also, you must take care of debt and income. As if you have below 10% on all your cards, and adding all the debt becomes 50% or closer of your total income, your credit goes down as well (I "love" how smart are the peps who invented this :lol: You are screwed almost always. I know several tricks... but I'm sure I'm failing in a lot of detail as well)

its great , it would definitely help the people.

Followup question:

Is the debt-to-limit ratio calculated across all cards, or individually per card?

For instance, I have a high interest card that I'm trying to pay down, partially by opening two new low-interest cards and transferring the balance. So now I have $2000-, $1500-, and $1000-limit low-interest cards that are nearly maxed, and a $10000-limit high-interest card with $6000 on it.

So my debt-to-limit ratio across all cards is 9500/14500, or 65%, but individually it's more like 95%/95%/95%/60%.

My wife and I could transfer about $2000 of this to one of her cards that's nearly paid off. Would it make any difference if I applied this strategically to the lower-limit cards to get them each below 50% of their individual limits?

That is, does it make any difference if the cards post-transfer were at 50%/50%/50%/60%, or do they only look at the totals for a new overall ratio of 58%?

Thanks!


Bryan Lovely

Quote:

I advise people to stay below 30% of their credit limit.

I agree, 30% is optimal.