How to Utilize Your Credit Card to Help Your Credit Score

By Alexandra Scicchitano

     Not a lot of people know how to utilize your credit card to help, not harm, your credit score. 

     According to Lynette Stevenson, owner of D.A.L.S. Credit Solutions & Notary, there are 5 aspects that influence your credit score. They are payment history, age, credit card utilization, overall credit and mixed credit. This article will focus on credit card utilization to help your credit score.

     Credit utilization rate is tracking how much credit you have available on your credit cards and how much you are spending of it. Credit utilization rate can impact as much as 30% of your credit score, according to Experian. But it is recommended by Experian to be blow 30%. For every $10,000 credit you have, it’s recommended to only use $3000. 

     Generally, when credit scoring models are interpreting dating, having a lower credit utilization rate means you are using less of your available credit and managing your credit by not overspending. 

     There are a lot of ways to manage and take care of your credit utilization. Paying your credit card balances in full every month is a great way to take control of your credit. Even just keeping the balance relatively low is better than missing a payment if you’re not able to pay in full. 

     Opening new credit card accounts that have zero balances is a good way to also just keep your credit utilization rate down. If you have no intention of using them, having them increases your overall account opens number, and shows you are capable of managing multiple credit card accounts without any problems. 

     Requesting an increase on your credit cards, but not using it will decrease the credit utilization rate, so the percentage of open credit is more and used credit is less.

     According to Experian, your credit utilization rate is just one of many factors that can affect your credit scores. It's important to understand how it works, and how you can manage credit utilization to make it work for you.

     It will take some time figuring out how credit card utilization works for you, but in the long run, it can have a very positive impact on your future credit scores and reports. 

           Your credit will continue to take hits if you do not utilize credit cards correctly. Reach out to D.A.L.S. Credit Solutions & Notary to help you manage your credit and to start understanding and taking advantage of credit card utilization. 

     Take control of your credit, let us help you do that, D.A.L.S. Credit Solutions & Notary.