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How do Credit Limits Affect your Credit Score? - A Logix Video Blog

Posted by Admin on 5/11/2016

 

 

If you think having high credit limits on your credit cards, means you must have a good credit score, think again.

Here’s how to use your available credit to increase your credit score.

Think of your available credit as a big empty swimming pool.  The amount of that credit you actually use is like the water.  If you just use a little, creditors figure you’re nice and safe in there and nobody gets hurt.

But if you use most or all of of your credit limit, creditors figure you could get in trouble, like an inexperienced swimmer in very deep water.

For the best credit score, you want to use less than half of your available credit.  Using just 30% is even better.  It shows you’re being a responsible person.

So the next time you need a loan and a creditor dives into your credit report, the water will be fine.

Do us a favor: Subscribe to this blog, then tell your friends about us so they can be smarter about their money, too.

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Topics: Credit Cards, Credit Scores, Debt

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Feel free to peruse about. Here you’ll find stories, posts and tools aimed to assist you as you’re faced with daily to once-in-a-lifetime financial quandaries. This is your SmartLab (lab coat optional). We want you to get the most from our articles, and we welcome your ideas to help us continue to bring valuable content to you. Check out the comment section at the bottom of every post for easy ways to share feedback. We’re learning, too, and what better way to encourage smarter banking than to share tips and resources with each other? Not to mention, it’s a great chance for us to get to know each other!

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