Credit Repair and Debt Utilization Ratios in Austin
Credit Restoration and Debt Utilization Ratios can assist many people in San Antonio and Austin and other cities throughout Texas in improving their credit.
One of the most commonly misunderstood topics in the world of credit is debt utilization. FICO uses a criteria for identifying and computing a consumers risk and credit score which is made up of 5 key categories. One of which is debt utilization. An easier way to remember this is to ask yourself- where do I stand on my credit card balances? I have heard many different people give different opinions on where they feel a consumer should be at on their credit cards in relation to their credit limits to help maximize the potential for their scores to improve. Many people will say 30%, others will say 50%…neither of these is correct. FICO has released this information in their training programs for FICO Certified Professionals and the information provided shows that a credit card balance of 0-19% is the best place for a consumer to be to maximize their potential for their credit scores. The next criteria is 20-39%. Obviously being at 30% has no real significance because it falls right in the middle of the second tier. A good rule of thumb to remember is that anything beyond 39% is a BAD place to be if you are planning on purchasing something on credit in the near future.
Something else to keep in mind is the fact that paying down a credit card to the best possible target ratio of 19% or less is something that will normally take at least 30 days to reflect on your credit report. Another option however is if you are utilizing the services of a “Rapid Rescore” which can potentially update in 24-48 hours in a best case scenario. A credit report can and will see a SIGNIFICANT boost in the score if a person is over utilized on their credit ratios and a reduction in the balance of the cards that are impacting the file is applied correctly. For more information on this topic please feel free to contact us at 1-888-900-5138 or to schedule a free credit consultation click the button below.