Your credit score in a high interest rate environment is key to keeping costs down. Here is a look at credit utilization score.
Posted by Anthony Licciardello on
Credit utilization refers to the percentage of your available credit that you are currently using. It is a key factor in determining your personal credit score. Credit scoring models consider both your overall credit utilization across all your credit accounts and the utilization on individual accounts.To calculate your credit utilization, you divide your total credit card balances by your total credit card limits and multiply the result by 100 to get a percentage. For example, if you have total credit card balances of $2,000 and a total credit limit of $10,000, your credit utilization would be 20% (2,000/10,000 x 100).
Credit utilization is important because it is seen as an indicator of how responsibly you manage your credit. A lower credit…
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